MagneGas Corporation (NASDAQ: MNGA)

 

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MagneGas Corporation (NASDAQ: MNGA)
converts liquid waste into hydrogen based fuels

        Website: www.cegx.us
    

MagneGas Corporation (NASDAQ: MNGA) is the producer of MagneGas™, a natural gas alternative and metal working fuel made from liquid waste such as sewage, sludge, manure and certain industrial and oil based liquid wastes. The Company's patented Plasma Arc Flow™ process gasifies liquid waste, creating a clean burning fuel that is essentially interchangeable with natural gas, but with lower green house gas emissions. MagneGas™ can be used for metal cutting, cooking, heating or powering bi fuel automobiles.

Investment Highlights

  • The Next Tech Boom?. Alternative or “Green” energy is purported by many to be the next booming industry for the stock market.

  • Industry Incentives. President Clinton endorsed the possibilities of the green energy explosion. President Obama is helping promote the conversion to more “responsible” forms of energy through incentives.

  • Green Energy Revenues Continue to Grow. Revenues relating to green energy grew by more than 38% from 2007 to 2008. By 2018 it is forecast that the three main clean technology sectors will have revenues in excess of $325 billion.

  • Limited Competition. While many companies are focusing their attention to green energies that have stiff competition, the area of industrial waste presents an area of need with limited companies having solutions or having the technology intact presently.

  • Solid Leadership. MNGA was founded in 2007 by a world-renowned Harvard and MIT physicist and supported by executives with high-level experience in the industry both nationally and internationally.

  • Growth In Operations & Revenues. Unlike many “emerging” companies, MNGA has already been generating revenues in 2010. Shipments of MagneGas have been sent to the Middle East and a Joint Venture in China has generated cash flow and established an international base to market their technology and products.

  • Company’s Technology Produced Most Environmentally Friendly Fuel. The Company’s patented Plasma Arc Flow™ systems gasifies liquid waste, creating a clean burning fuel that is essentially interchangeable with natural gas, but with significantly lower greenhouse gas emissions. The environmental impact is less than any other fuel, and far greater than any fossil fuel.

  • Technology Useful In Various Forms Of Liquid Waste. The system can be used for many forms of liquid waste including, but not limited to, sewage and sludge, farm manure, glycerine & bio-fuel by-products, petroleum by-products and oil-based wastes. The water produced through the conversion is cleaned and suitable for irrigation.

  • Growing Natural Gas Market. There are approximately 125,000 natural gas-powered vehicles on the road already in the United States, but that number could increase dramatically in the near future as House lawmakers are expected to vote on legislation before Congress breaks for recess in August to provide a federal rebate of $10,000 for natural gas cars and up to $64,000 for heavy trucks.

Profile

In our opinion, “green” technologies could be the next tech boom and producing companies that can rival the gains of the 1990’s. Green technologies are not simply wind or solar power. They encompass many fields and industries, including renewable energy (wind power, solar power, biomass, hydropower, and biofuels), information technology, green transportation, electric motors, green chemistry, lighting, and many other appliances that are now more energy efficient. Generally speaking, green energy is any energy that is produced in a manner that has less of a negative impact to the environment than energy sources like fossil fuels, which are often produced with harmful side effects and limited by nature.

Speaking on alternative energy initiatives in early 2009, former President Clinton claimed that “Alternative energy would spark the largest job boom we’ve had since World War II ─ and we wouldn’t have to shoot anyone to do it!” This sentiment is echoed by President Barrack Obama with his commitment to “invest $150 billion over the next ten years in energy research and development to transition to a clean energy economy.” It is not just the federal government that is offering incentives, more than half of the states in the U.S. (accounted for nearly 80% of all the people in the U.S.) have enacted Renewable Portfolio Standards further encouraging, in some cases mandating, green technologies.

The green energy expansion is not merely a fad, as some at first believed it could be. It is growing in strength and gaining major momentum. This is verified through both the incentives from all levels of governments and through facts and figures. Clean technology venture investment reached $6.1 billion in 2007 in North America, Europe, Israel, China and India. That number was crushed by more than 38% in 2008 when venture investments grew to $8.4 billion. 2008 marked the 7th consecutive year of increased investments. Even though clean tech investments slacked some in 2009 along with the rest of the economy, the boom is back as Dow Jones VentureSource reported investments in startups and emerging growth companies popping up 38% in the first quarter of 2010 as compared to 2009.

Revenues from clean energy have steadily been on the rise over the last decade. The increase in global awareness of the impact of actions on the Earth combined with incentives mentioned above and an overall better understanding of the technologies involved are propelling revenues higher each year. The three major clean energy sectors, solar photovoltaics, wind power, and biofuels, saw their combined revenues climb to $115.9 billion in 2008, a 53 percent boost from $75.8 billion in the previous year. By 2018 it is forecast that the three main clean technology sectors will have revenues in excess of $325 billion.

While many green companies are focusing their attention on wind and solar power, there is an area of great need in the waste to energy sector of the industry. Waste is a huge concern in our ever-growing world. Many companies are focused on solid wastes and how they can be converted into biofuels. In particular, a focus is on plant related energy possibilities. For example, the remains of plants processed for human use molder in landfills worldwide. The cellulose in these wastes, albeit a blade of grass or a piece of paper (obviously derived from trees), are broken down by microbes in landfills and converted to methane. It has been proven that the methane can be harvested and converted into cellulosic ethanol fuel.

While the majority of companies focus on what we will call the more “obvious,” the number of companies devoting their energies to issues that still consume the world is somewhat limited. While solid waste is definitely an issue, liquid waste is a major concern as well, but just not as well publicized. I guess it is somewhat understandable as “sludge” is not something that is usually a topic of dinner conversation. Be that as it may, liquid waste is harming our world’s ecosystem and is a significant global concern.

MagneGas Corp. (OTCBB:MNGA) focuses on green technology for recycling liquid waste into useable byproducts, including a hydrogen-based fuel named MagneGas™, which is used as a natural gas alternative and metal cutting fuel. MNGA, based in Tampa, FL, was founded in 2007 by world-renowned Harvard and MIT physicist, Dr. Ruggero Santilli.

MagneGas Corporation is led by a quality management team consisting of pioneers in physics and high-level experience within the industry both nationally and internationally. Dr. Santilli, with a long list of distinguished accolades in both mainstream and fringe physics, including being nominated for the Nobel Prize in physics and chemistry and the 2009 winner of the “Gold Prize Mediterraneo” for Science and Technology, holds the positions CEO and Chief Scientist for MagneGas.

The Company’s patented Plasma Arc Flow™ process is the foundation of their operations. Through a combination of turbo-heating (10,000 degrees), electric current (1,000 amps) and ultraviolet rays, the Plasma Arc Flow system gasifies liquid waste, creating a clean burning fuel that is essentially interchangeable with natural gas, but with significantly lower greenhouse gas emissions. The environmental impact is less than any other fuel and far greater than any fossil fuel.

The system can be used for many forms of liquid waste including, but not limited to, sewage and sludge, farm manure, glycerin & bio-fuel by-products, petroleum by-products and oil-based wastes. The water produced through the conversion is cleaned and suitable for use in irrigation.

Further supporting the value of MagneGas, is the fact that it is dramatically cleaner and less expensive to produce than other alternative fuel and does so with taking up very minimal space. The Plasma Arc Flow recycler occupies only a 10 foot (3 meter) by 30 foot (10 meter) footprint and can be placed anywhere, even indoors as it is quiet and does not emit any harmful exhaust.

MagneGas can be used for metal cutting, cooking, heating or powering biofuel automobiles. Any vehicle that runs on natural gas can run on MagneGas with absolutely no conversions required. It has also been shown that gas powered vehicles can run on natural gas (and thus MagneGas) with installation of pressurized tanks, and another set of injectors on the intake manifold.

There are approximately 125,000 natural gas-powered vehicles on the road already in the United States, but that number could increase dramatically in the near future as House lawmakers are expected to vote on legislation before Congress breaks for recess in August to provide a federal rebate of $10,000 for natural gas cars and up to $64,000 for heavy trucks.

The international market for MagneGas is even greater at the moment. While the number of natural gas vehicles is growing steadily nationally, it is still significantly smaller than the world leader, Pakistan, which already has over 2.3 million natural gas vehicles on the road according to the International Association for Natural Gas Vehicles. The automobile power industry is a more distant for MagneGas as overall growth and usage continues to be more mainstream, but other applications for the green gas is being applied today.

MagneGas is establishing itself as an industry leader in the $680 million metal cutting industry. MagneGas has demonstrated unsurpassed performance and economy for metal working as it cuts faster and with narrower kerf, cuts cleaner with less slag and no top edge roll-over, is non-toxic and less expensive than all other present industry gases.

The list of potential sources of revenues for MagneGas is lengthy, to say the least, as gas products are in use virtually everywhere. The industrial vehicles market (i.e. forklifts and other industrial vehicles) is a $2 billion a year industry. MagneGas already has these vehicles running at their corporate headquarters. Not only is MagneGas more efficient, but also emits substantial oxygen, enriching the atmosphere.

A final long-term business strategy involves the industrial and home natural gas/hydrogen market. The International Journal of Hydrogen Energy estimates this industry to grow to a $12 billion market by 2012.

While much of the focus has been on the many uses for the MagneGas that can be produced from the Plasma Arc Flow Recycler, it is important to recall where the process begins; through the elimination of liquid waste. The potential in this regard is tremendous as it can treat overflow and sludge for municipalities and communities of all sizes as well as being a great resource for commercial and industrial companies.

MagneGas is emerging quickly as they have been implementing their business plans and seeing success already. Earlier this year, the Company announced the international sale of MagneGas™, selling 294 cylinders of the MagneGas™ fuel to United Arab Emirates ("UAE")-based United Gas Company ("UNIGAS"). On March 18, 2010, MagneGas received $950,000 toward a $1.9 million contract for a Plasma Arc Flow Refinery (remainder due upon completion). On June 30th, MagneGas also received a $1 million dollar payment as part of a Joint Venture with Beijing-based DDI Industry International for exclusive China market rights of the MagneGas technologies. Another nearly $1 million payment is anticipated on September 30, 2010 as fulfillment of the contract.

From a technical standpoint, the one-year MNGA chart has a classic “double bottom” pattern at this moment. A support level has held at $.07 throughout the year with the last run off these levels exceeding 200% gains as the price per share (PPS) climbed to almost $.25 in the month of March. Standing in front of a large move again is some resistance at $.09 brought about in part by previous price per share and, more importantly, the 50 day moving average (DMA). More significant resistance will come at $.10. Not only is a dime a typical psychological barrier, but it was a solid support level throughout May and into June. Upon slipping under $.10, the resistance has stood firm since. The price per share is still trading inside the bollinger bands and in close proximity to all the short term moving averages as well as the 50 DMA. If a move to the north happens, the price will draw support from these moving averages, in particular the 50 DMA. Lower indicators are aligning pretty nicely at the moment as there is positive divergence of the MACD with the PPS which is sometimes used in helping determine a possible reversal.

Particularly interesting to note about the chart is the level of the positive and negative DI’s in the ADX indicator. They are both at exaggerated levels with the –DI being over 60 and the +DI approaching 10. While susceptible to whipsaw motions, these portions of the ADX tend to not want to stay at these extreme levels and when positioned in this manner, they tend to correct themselves. Some positive strength is needed to be displayed in the chart to bring them back to more moderate levels. Always remember that not only is this purely our interpretation of the ADX, but it is meant to be used in combination with other indicators, not alone, in the formulation of chart analysis. As always, this is merely AllPennyStocks.com's evaluation of the MNGA technical chart. We always recommend that all investors do their own due diligence and consult with a qualified financial advisor prior to making any investment decisions.

With an ever-increasing global focus on “going green,” the evolution of industry is seeing an increasing change in technology to accommodate the trend shift and still provide superior products. The government is demonstrating support like never before in this evolution through greater incentives to preserve depleting fossil fuels and encouragement of more environmental responsibility.

The technologies of MagneGas Corporation can play a valuable role in the world today as its patented products are multi-dimensional. Not only do they address an area of great need with regards to the disposal of liquid waste, but the “green” gasified byproduct of the waste is a viable, superior alternative to many of the gases that we use today. It is for these reasons as well as many others, that we at AllPennyStocks.com have turned our attention on MagneGas Corporation (OTCBB:MNGA) as our latest U.S. Company spotlight and encourage investors to do their own due diligence on the Company and add it to their watch lists.


NASDAQ Symbol: MNGA

Current Price: $1.03

Shares Outstanding: 47.7 million

Market Cap: $47 million
52 Week Trading Range:

52-Week Low: $0.42
52-Week High: $1.59

Corporate Offices:
150 Rainville Rd
Tarpon Springs, FL 34689

Website:
www.magnegas.com
Phone: (727) 934-3448
Email:  Scott.Wainwright@magnegas.com

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