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News :: Environment
You Can't Judge A "Green" Book Value By Its Cover Current rating: 2
01 Feb 2003
The high costs of hazardous toxic waste cleanup has cities and industry reeling. Technology may be the answer.


You Can't Judge a "Green" Book Value by its Cover

By Freddie Mooche - Axcess Business News

Pollution regulations have become a double-edged sword. The Environmental Protection Agency as well as State and Local agencies are attempting to enforce them while communities and industry shirk its costs.

Massachusetts ranks near the bottom in the nation for checking on industry's compliance with environmental laws, especially in minority neighborhoods, according to a new federal website that for the first time allows the public to monitor how anti-pollution laws are enforced.

Only 27 percent of facilities holding major environmental permits have been inspected by state or federal regulators in the past two years, a rate lower than all but three other states, according to the US Environmental Protection Agency.

In Hartford Illinois residents have been having problems with local oil refineries. The Illinois Environmental Protection Agency, responding to the latest complaint found benzene in four different levels of between 10 and 12 parts per billion in effected houses. The release prompted local reports finding's of the existence of 3.8 million gallons of gasoline in the local water table.

Dennis Bedwell, a Hartford resident, summed it up this way, 'I have a daughter living at home and I'll fight for my family." Mr. Bedwell lives directly across from Premcor Refinery, who has had more than one problem in that community. In response to the complaints, the Illinois Attorney General told Premcor that they had to increase the rate at which they have been removing this gasoline over the last ten years. Premcor refused.

A series of class action suits have been filed against Premcor refinery by Illinois attorney, Mary Ann Pohl, who says the courts have certified three classes in an action against Premcor.

In Pennsylvania, with much fanfare in July 1998, Lehigh, Northampton, Monroe and Schuylkill counties began the curbside collection of leftover household paints, solvents, motor oil, pesticides and other hazardous wastes, offering residents a convenient way to help protect the environment.

But after 41/2 years, the popular program has been scrapped, and it isn't likely to return in the curbside collection format that's resulted in more than 6,300 pickups over the past two years.

'"We could not afford to do it at this rate,'" said Lehigh County Planning Director Robert E. Korp, noting that the county's budget crunch for 2003 helped kill the program.

Even the military is feeling the crunch of environmental regulations, attempting to assuage the White House to give government bases exempt status.

Within all these communities one common cry is heard; cost. While costs run high to remove hazardous waste industry and government are turning to technology to find ways of not only cleaning up hazardous waste but also ways to dispose of it. This has spawned a surge in newer technology applications being deployed by environmental companies.

Cleaning Up In Green Investments
(environmental stocks, by the numbers)

Axcess Business News looked at several of these smaller hazardous waste companies and compared them by the numbers. Our findings were interesting. The Environmental Services Industry is expected to see 13.9% annual growth over the next five years, according to Charles Schwab's "Equity Snapshot Report." MarketWatch had given those figures to be more like 25.93% according to their Nov 17, 2002 Waste Management Services Fundamentals. Regardless of whose figures are more accurate, in either case the consensus is one of double-digit growth over the next five years.

But according to comments made to Axcess Business News by a Charles Schwab representative in their Reno Nevada office, "Schwab does not provide investor advice" and their reports are purchased from third-parties. However in the fine print it states, "this report report may include the Schwab Equity Research Department's Schwab Equity Rating," Nice try Chuck. Axcess Business News noted discrepancies in MarketWatch's report as well, leaving the true figures somewhere in between those estimates.

Axcess Business News examined three companies, whose links to their individual write-up can be found below. In looking at these newer technology driven companies each was classified a Micro Cap Stock, each had unique stories on their business and the technology they offer.

Clean Harbor (Nasdaq: CLHB) provides environmental services to customers in the United States and Puerto Rico and recently completed the acquisition of Safety-Kleen's Chemical Services Division (CSD) on September 10, which accounted for 25% of its revenue. Shares of Clean Harbor have risen sharply in the last three months while its value to investors fundamentally has fallen. Shares closed Friday January 24 at $14.18. We noted that insiders during this time have been selling. Clean Harbor's 52 week high is $17.82. By the numbers, while this company has shown good growth for its shareholders, at its present levels other opportunities might fair better. Clean Harbor's insiders must have thought that as well.

Axcess Business News added Clean Harbor (CLHB) to its Small Cap Stocks Guide January 24 in its "worst picks" column and will be following this stocks performance for our members.

Perma Fix Enviro Services (NASDAQ: PESI) treats, stores and disposes of hazardous industrial and commercial wastes. PESI had recorded an increase in revenue of 39% for 3Q primarily attributed to its nuclear waste segment. Revenues for the nuclear segment were $13.5 million for the quarter, reflecting an increase of 140% over the same quarter of 2001. This increase is principally a result of the growth in the mixed waste revenues due to the Company's continued buildup of this new strategic market.

These favorable results for the nuclear segment were negatively impacted by the industrial segment which experienced an overall slowing principally due to the current economic downturn, according to the Company.

Axcess Business News noted that while PESI has had a good year, its sales per employee ($149,570) was near the industry average ($186,000), suggesting its potential to continue showing robust growth could be curtailed without higher expenditures in its G&A expenses. We suspect that this could stall future earnings growth and have a "wait and see" view towards this company. Apparently Wall Street shares that view as PESI stock price showed little to no reaction following its November 11, 2002 announcement of improved earnings.

Environmental stocks are typically sensitive to news when newer technologies or applications are involved. PESI closed January 24 at $2.47. Its 52 week is $3.50 which it hasn't seen since April 2002. CBSMarketWatch columnist, Mark Hulbert, began touting PESI in his column January 15. Hulbert's MarketWatch story discloses that he publishes the Hulbert Financial Digest that most likely also featured PESI.

Axcess Business News added PESI to its Small Cap Stock Guide Jan 24 in its "Best Picks" column and will be following this stocks performance for our members. While adding it to our column our view is more wait and see than anything else. While PESI had a good quarter in its Nuclear segment, we do not expect those kinds of improvements to continue as rapidly although long-term PESI seems to be a safe bet, or Green Investment.

KBF Pollution Management (OTCBB: KBFP) owns the patented technology for separating toxic and heavy metals from waste water and hazardous materials. The Company's Selective Separation Technology boasts the ability to virtually eliminate hazardous waste. KBFP boasts that it can clean up toxic waste to the point of eliminating landfills.

Of the three Micro Cap companies examined, KBFP is no stranger to Axcess Business News. We had featured it in a top story Nov 25, "Green or Mean Returns," shortly after adding it to our Small Cap Stocks Guide "best picks" column on Nov 18. That story and stock pick selection were prompted by a news release KBFP had made Nov 14 announcing a 50% increase in sales, verses PESI's 32% increase. Another company featured in that Nov 25 article, Greenman Technologies, Inc. (AMEX: GRN) was not included in this story as its core business is recycling tires not hazardous waste treatment. Greenman Technology had been interviewed in our Inside Wall Street column following its listing to the AMEX. Mr. Chuck Coppa, GRN's CFO was featured in that interview.

Axcess Business News received lots of queries on KBFP following that Nov 25 news article, prompting us to interview its President, Mr. Kevin Kreisler, on the company's recent news and its plans. That interview appeared in our Spotlight column, hosted by Armando Duke, December 9, 2002.

KBFP had climbed from $0.05 on Nov 18 to close on Jan 24 at $0.06. Shares had traded over $0.07 before settling back on Jan 24. Like PESI, KBF Pollution Management Inc had a great 3Q but unlike PESI its stock price reacted positively to its news. In addition, the Company's sales per employee was only $82,000 verses an industry average of $186,000. Axcess Business News believes this to be a positive figure for KBFP and suggests that its improvements are likely to continue unhindered by personnel constraints that would otherwise push up costs parallel to growth. KBFP remains in our Small Cap Stock Guide "best picks" column and is viewed to be "very positive" in expectations of continued improved revenue and earnings.

Of note was a letter of intent KBFP had announced on Dec 19, 200l to acquire Jones & Co., a Connecticut based hazardous waste business. Axcess Business News believes KBFP may be positioning itself to far outperform its peers should that acquisition be completed. The company had made significant plant expansions in 2002 in anticipation of that acquisition being completed.

To view these companies individual numbers, click on any of the links below.

Clean Harbors (NASDAQ: CLHB) KBF Pollution Mgt. (OTCBB: KBFP)
Perma Fix Enviro (NASDAQ: PESI)  

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Re: You Can't Judge A "Green" Book Value By Its Cover
Current rating: 0
01 Feb 2003
It seems like pretty honest reporting. I checked the website and it says they weren't paid to write this story. The other financial websites for the most part don't seem care; they say nice things about General Motors and the next page has a big ad for SUV's! I like these guys! Subscribed too!
Re: You Can't Judge A
Current rating: 0
01 Feb 2003
The story gets posted and just 12 minutes later someone has already read the article, purused the linked websites, and subscribed to the "services" offered? This is a bit unbelievable, considering that we don't get many readers here that give a shit about what the dominant business media reports. Axcess doesn't seem to be a bit different than any of the rest of those charlatans.
Inside The Mind Of Saddam Hussein
Current rating: 0
01 Feb 2003
Modified: 02:58:45 PM


M H Ahsan, Dhamaka News  EditorINSIDE THE MIND OF SADDAM HUSSEIN

By M H Ahsan - Editor, Dhamaka News - This Week's Guest Commentary

The ultimate fate of Saddam Hussein, the world's most notorious control freak, may ultimately be decided by U.S. President George W. Bush, the son of an old foe.

Both men's biographies and narratives are the stuff of mythology, but the conflict between these two men -- and their countries -- is seen by many experts as almost tribal, on some levels.

While much has been written about the fact that Bush is picking up a battle left over from his father's presidency in the early 1990s, there's not a lot of solid information on what's motivating Hussein to stick to his hard line in this current standoff.

Military leaders and political opponents have probed Hussein's psyche since his rise to power. Analysts are now trying to predict how he might react if Iraq is attacked by looking for clues in his past.

Escape from village life

Saddam Hussein's beginnings can be traced to the small village of al-Awja. In his early years, in keeping with tribal customs, three dark-blue dots were tattooed on his wrist. These dots, still visible today, are a reflection of his humble origins.

Some analysts say Hussein built his regime according the tribal mindset of his village where power is achieved and maintained through force.

The Iraqi president was born in 1937 in the small village of al-Awja just outside Takrit. Hussein's own father either died or abandoned the family. His stepfather repeatedly beat him, and forced the young boy to work on the small family farm.

There were no close bonds, no one he could count on, and no one he could trust. Spurned on by a desire to become literate, Hussein ran away when he was 10 to live with his uncle Khayrallah Tulfah.

His uncle, a firebrand who spent five years in jail for his nationalistic leanings, introduced Hussein to a new world. The young man was soon steeped in Arab history and his uncle's tales. Chosen heroes were drawn from the far past: Saladin (famous for having recaptured Jerusalem from the Crusaders in the 12th century) and Nebuchadnezzar (considered the most powerful of all the Babylonian kings, whose army made a similar conquest of Jerusalem in B.C. 598).

Hussein gravitated into politics as a teen and joined the socialist Baath party at 19. Three years later, he participated in the 1959 assassination attempt against Iraqi Prime Minister Abudul Karim Kassim. Even though he was shot during the botched assassination, Hussein was not deterred.

In 1968, Hussein was part of the revolt that brought the Baath party to power under General Ahmed Hassan Bakr. He assumed the post of vice president and built a network of secret police to root out and murder dozens of government officials suspected of disloyalty. Eleven years later in 1979, Hussein moved into the top spot when he toppled Bakr.

A brutal life in politics

When his country was at war with Iran in the 1980s, he asked his cabinet ministers to give their advice. His Harvard-trained minister of health suggested that Hussein should temporarily step aside until peace was restored. Hussein reportedly thanked him and then ordered his arrest.

When his wife begged for his return, her husband's body was chopped into small pieces and delivered to her in a canvas bag. That was in 1982 and few inside his inner circle have challenged him since.

Hussein's war with Iran lasted eight years and ended in a stalemate. He hasn't restricted his large-scale attacks to neighboring countries. In the early 80s, he crushed a Kurdish rebellion in northern Iraq by using chemical weapons.

"Here is a person who, for the sake of his own grasp for power and ambition, has been willing to execute hundreds, thousands of his own citizens," US Assistant Secretary of State David Welch said following the Gulf War.

Friends and family feared him

A former mistress told ABC that Hussein placed his own son in the cross hairs of his wrath. Parisoula Lampsos said he tried to have his son Udai Hussein assassinated when he feared he might remove him from power.

Udai, who is the oldest of Hussein 's five children, survived the 1996 attempt on his life but sustained serious injuries. Like his father he is known for his brutality.

Udai first made headlines when he beat one of Hussein's aides to death at a party being held in honor of Suzanne Mubarak, the wife of the Egyptian president. At the time, Hussein pressed murder charges against his 24-year-old son but later dismissed the death as accidental.

The narcissistic borders of Hussein's world are legendary. A 600-page hand-lettered copy of the Koran on display in a Baghdad museum was written with Hussein's blood, which was donated a pint at a time. He plastered the streets with massive portraits of himself when he ousted Bakr.

The six-week Gulf War left his country in ruins. Sewage systems and telephone lines were out, electrical grids were down, and Hussein found himself in an underground bunker. He emerged from the ruins convince he had won the war.

When his old foe, the senior George Bush, lost the 1992 presidential election, Hussein stood on the palace balcony and fired his gun in celebration.

Lampsos told ABC that Hussein liked to smoke Cuban cigars and watch tapes of his enemies being tortured, sometimes wearing a cowboy hat to the viewings. She said it was his "happiest" time.

Hussein usually begins his days by swimming laps. At six foot two, he remains an imposing figure although he now walks with a limp. Dye keeps his hair jet black and his former lover says he enhanced their sexual encounters with Viagra. In recent years, he has replaced his military uniforms with well-cut suits.

Like Palestinian leader Yasser Arafat, he has spent most of his political life sleeping in a different location each night. He drinks warm milk with honey, eats plenty of fresh fruit and vegetables, and prefers fish to meat. But details of his living habits have failed to crack the code that dictates his thought process.

Thinking like the enemy

Former US Ambassador Robert Oakley told CNN it would be a huge mistake to underestimate Saddam. In reference to a three-week US war exercise that he participated in over the summer, Oakley said that the complexities of Saddam's psyche make it difficult to anticipate his next move.

"Exactly what's he [Saddam Hussein] going to do? How he's going to do it? How strong will the allegiances be of those who will follow him or defect from him? These are things that are subjective. They're very, very hard to judge but they're going to be very, very important in the outcome," he said.

Dr. Jerrold M. Post presented a psychological profile to the House Armed Services Committee when the US was on the brink of going to war with Iraq in 1990.

The psychiatrist said that while Hussein was extreme, he rejected the opinion that he was a "madman." He also dismissed the idea that Saddam was unpredictable, saying his behavior had proven to be consistent over time.

"When he pursues a course of action, he pursues it fully, and if he meets initial resistance, he will struggle all the harder, convinced of the correctness of his judgments.

"But if circumstances demonstrated that he miscalculated, he is capable of reversing his course. In these circumstances he does not acknowledge he has erred, but rather views himself as adapting flexibly to a dynamic situation," Post said.

Since the early 90s, US policy has favored a coup to remove Hussein from power but numerous attempts have failed. As for what Hussein would do if he was backed against a wall, Post believes he would seek an escape route at any cost.

"Saddam will not go down to the last flaming bunker if he has a way out, but he can be extremely dangerous and will stop at nothing if he is backed into a corner.

"If he believes his very survival as a world class political actor is threatened, Saddam will respond with unrestrained aggression, using whatever weapons and resources are at his disposal, in what would surely be a tragic and bloody final act," he said.

About this week's Guest Commentary's Author

Contributing Author - M H Ahsan

Prominent Journalist, Commentator, Writer and Editor in Chief for www.Dhamaka News.net & www.HyderabadNewz.com. He has written many books on different topics, produced and directed many television documentaries and news-based programs of global appeal. Aged 39, Indian national, with a good record and reputation.

M H Ahsan
Email: editor@dhamakanews.net
Website: Dhamaka News

Axcess Business News Comment: ThamakaNews is an Axcess Business News Partner Site. This guest commentary is Mr. Ahsan's perspective of a global concern. He lives in his native India where he publishes Dhamaka News. We are very honored to have such a talented journalist join our Partner Site Program and contribute his work. On an added note - we will be putting up a special section on News from India where we will be featuring news from that part of the world, courtesy of Thamaka News! Kind of a "home away from home" for the thousands of Indian's now living here in North America, and certainly an insightful and interesting section for everyone! Enjoy!

Eric Stevenson
Editor
Axcess Business News

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High Tech Wars
Current rating: 1
01 Feb 2003


High Tech Wars

Its high-tech war; from the Gulf to board rooms, the fight is being carried out with the latest technologies. There aren't any soldiers in these wars, only circuits, software and wireless communications.

By Freddie Mooche - Axcess Business News

Japanese war shipA Japanese warship equipped with a high-tech Aegis missile detection system left for the Indian Ocean on Dec 9, a controversial move some analysts say signals support for a possible U.S.-led attack on Iraq.

Japan now has four of the ships, another is on order and funds have been requested for one more.

In other high tech circles, accounting software makers are trying to capitalize on a string of high profile scandals by developing computer programs that flag unusual bookkeeping and launch investigations with little human intervention.

As technology advances few components are as vital as the circuitry being used and most of that technology is U. S. property. During the boom and bust days of the semi conductor industry, trade swung from U.S. dominance to Asian markets and back again.

Chinese high tech assembly workersChina too has been getting more involved as a world player in these fast-paced shifts of economies, providing many labor intensive tasks for lower wages that manufactures have chased around the world to find. In every shift of that economy, countries have been left with idle workers as competitive prices forced component manufactures to seek new sources.

While high tech economies continue to shift, American circuit manufacturing is still the dominant player. According to Standard & Poor's, their investment outlook for the S&P Electronic Equipment and Instruments Index is neutral overall, but they view positively the electronic contract manufacturing component of the Index. S&P also believes economic recovery may not occur until the second half of 2003, as the sub-industry group's recent 13-week decline supports their view that overall business spending will not recover that quickly.

S&P View of Electronic Contract Manufacturing Remains Positive

Industry fundamentals are improving; inventory levels have declined considerably, the book-to-bill ratio for printed circuit boards is well above trough levels, and production of goods is being shifted to lower cost world regions.

A trend toward out sourced manufacturing is gaining momentum, as companies seek to reduce costs while focusing on marketing and R&D efforts.

Over the long-term, technological and process innovations continue to spur demand for more advanced tools, aiding future earnings growth in the industry.

For electronic contract manufacturers, there has been a significant shift by computer hardware, networking and other vendors toward out sourcing manufacturing, and this trend shows no signs of abating.

Several companies are already showing signs of this shifting market, Jabil Circuit (NYSE: JBL) shares have climbed 14% in the last 30 days to close Friday at $18.30 after steadily declining from their 52 week high of $27.

IPFS and JBL 52-week comparative trading price chartA smaller player in the circuit board field, Integrated Performance Systems (OTCBB: IPFS) has shown similar swings in market trading to the Equipment and Instruments Index, closing up Friday 13.4% after being added to Axcess Business News "best picks" Stock Guide that morning. IPFS closed Friday at $1.10.

Although Integrated Performance had a 52 week high of $2.25, its shares faired better than JBL over that period showing similar declines but recovering on news of improved sales. The company had announced record volume of new orders on Nov 13 and announced an additional order on Nov 26, outpacing its Industry Groups overall performance.

(The above chart compares IPFS to JBL for the prior 52 weeks, IPFS is shown in black and JBL is in brown)

Where is the market going

Patriot Missles Defense giants typically out source many component requirements to small companies. Axcess Business News had touched on that area in our prior Top Story, "From Smart Bombs to Smart Bags - technology is in demand."

While S&P remains positive to the contract manufacturing component of the Index, analysts believe some companies will outperform even Standard & Poor's positive view. The companies that may fair best are those with niche markets like Integrated Performance Systems (IPFS) whose commercial RF circuit boards are especially valuable in underdeveloped nations that do not have telephony infrastructure in place as many of these countries move into wireless applications.

High performance computers and telecom switching equipment require more advanced circuit boards with improved signal integrity, lower weight, lower temperature and superior impedance control. These types of boards, DWT, are a more expensive process to manufacture but carries many distinct advantages, as described above.

Analysts expect that niche market to expand in proportion to the increases in computing speeds. Currently, worldwide DWT revenue is estimated at $40 million with domestic sales accounting for 35% of that market. The two domestic suppliers are Integrated Performance Systems (OTCBB: IPFS) and Advanced Interconnect Technology. Advanced leads that market with sales of $10 million while IPFS sales were only $3.7 million. IPFS estimates it will surpass Advanced in sales through innovative design and high quality workmanship.

Advanced, a privately held company focuses most of its efforts in custom wafer bumping to the semiconductor industry in Hong Kong while still procuring R&D funding. Advanced Interconnect Technology's market share is therefore only an assumption given the company's foreign operations and R&D status.

Integrated Performance Systems RF circuit boards have strong potential as well and internationally provide the company with multi-market opportunities for a specialty niche circuit board manufacturer.

Jabil Circuit (NYSE: JBL) designs and manufactures electronic circuit board assemblies and systems for original equipment manufacturers in the communications, computer peripherals, personal computers, and consumer product industries. For the fiscal year ended 8/31/02, revenues fell 18% to $3.55 billion. Net income fell 71% to $34.7 million. Revenues reflect decreased production of computing and storage products. Net income also reflects an increase in restructuring charge.

Axcess Business News believes that both JBL and IPFS are growth companies. Although JBL's faced down markets for its products and shrinking margins while IPFS has had the opposite happen.

Based on S&P's sub-industry outlook as of Dec 14, JBL shares may be overpriced at $18.30 with the lowest pretax margin (1.8%) of all those companies shown in that S&P Sub-Industry Outlook. Axcess Business News noted that for Peer Groups with more than 15 companies or stocks, S&P's selection is based on market capitalization. IPFS's market capitalization is less than $10 million. However, IPFS manufactures products with significantly higher profit margins and less competition, and has shown as much growth as JBL has shown shrinkage.

It appears to Axcess Business News that IPFS is undervalued, even at its prior 52 week high of $2.25 its shares would still be undervalued against its Industry Group's Peers based on operating margin.

One of the lowest priced stocks in that S&P Industry Group is SigmaTron International (NasdaqSC: SGMA), which closed Friday at $3.87. SGMA had pretax profit margins of only 2.9% and had climbed and fell on the same curve as IPFS from its 52 week high of $5.09 to as low as $1.39 before recovering.

IPFS shows signs of exceeding both JBL and SGMA's pretax margins in 2003 and is showing no signs of slow growth, supporting Axcess Business News views toward its share price being significantly undervalued at its current level. The Company may see its value climb to between $4 and $5.00 by mid-2003 assuming it continues its fast paced growth in sales and earnings.

Axcess Business News will continue to report on the electronic equipment and instruments segment of the Information Technology Sector, and these companies activities, for our readers. Watch your in-box for any news alerts on this and other late breaking business news. If you're not a member, consider subscribing now and you can get these great market alerts too!

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