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Over the last five years, global economic and political headlines have pushed an overwhelming number of investors into hot commodity trades. Gold and oil have been the center of attention as current economic woes have created a slew of volatile moves that indicate momentum trading rather than true fundamental valuation. With gold and oil stealing the spotlight, the world's greatest supply of energy and possibly its most undervalued commodity has gone unnoticed -- natural gas.
The United States currently has enough natural gas to supply our nation with energy for 100 years. The natural gas industry supports 3 million jobs and adds $467 billion to the U.S. economy. The Energy Information Administration (EIA) expects U.S. demand for natural gas to increase about 24% by 2035. In a "Natural Gas Year-In Review Report," the EIA stated, "Over the past several years, natural gas use for electric power has increased, with gas making up an increasing percentage share of total generation relative to coal. In 2009, natural gas made up almost 24% of net power generation. By comparison, in 1996, natural gas made up only 14% of power generation." North America is the global hub for natural gas with about 99% of the total gas consumed by the United States coming from North America. Just as the Middle East has been the controlling area for oil, the United States could someday become the epicenter for natural gas.
Natural gas is one of the cleanest burning fossil fuels, and its use is expected to continue to grow. Natural gas is used in the production of steel, glass, paper, clothing, brick, electricity, and as an essential raw material for many common products. Some products that use natural gas as a raw material are: paints, fertilizer, plastics, antifreeze, dyes, photographic film, medicines, and explosives. Slightly more than half of the homes in the United States use natural gas as their main heating fuel. Natural gas is also used in homes to fuel stoves, water heaters, clothes dryers, and other household appliances.
According to the EIA, in 2011, the Henry Hub natural gas spot price averaged $4.25 per million British thermal units (MMBtu), down $0.13 from 2010. However, the EIA expects the natural gas market to tighten in 2012, with the Henry Hub spot price expected to rise to $4.58 per MMBtu. This in addition to the United States' exports of natural gas to Canada rising approximately 25% in 2011 compared to 2010 and Mexico's rising nearly 100% for the same period.
While momentum traders focus on gold and oil, value investors are accumulating natural gas investments at a steep discount. Many chart technicians are even starting to discuss how the UNG (The United States Natural Gas ETF) has bottomed out. The UNG put a double bottom in at $15.00 on massive volume. An upside breakout from this level may not encounter heavy resistance until $40.00 for a 167% gain. If this indeed is the bottom for natural gas prices, it could equate to higher margins and increased profits for Universal Bioenergy.
Michael Perinotti believes that the natural gas revolution has begun. He, too, is looking for undervalued natural gas investments, and today issues a report on Universal Bioenergy Inc. (OTCQB: UBRG) (OTCBB: UBRG) as being possibly one of the most undervalued natural gas investment opportunities in the market today. www.universalbioenergy.com
UNIVERSAL BIOENERGY INC. ANALYSIS:
Universal Bioenergy's (OTCQB: UBRG) (OTCBB: UBRG) primary business focus is the production, marketing and sales of natural gas, oil and alternative energy. Through a subsidiary (NDR Energy Group LLC), they currently sell natural gas to 28 of the largest public utilities, electric power producers and local gas distribution companies that serve millions of commercial, industrial and residential customers throughout the United States. Universal Bioenergy (OTCQB: UBRG) (OTCBB: UBRG) is also engaged in the acquisition of oil and gas fields, lease acquisitions, and development of newly discovered or recently discovered oil and gas fields, re-entering existing wells, transmission and marketing of the products to their customer base. They are also experiencing double-digit growth with achieved sales in 2010 of $41,320,647 and a record $71,747,840 in 2011, a 73.64% increase year over year.
Management's primary objective is to exploit changes in the volatile energy market that companies with larger staffs, higher overhead, and higher operating costs simply cannot achieve as quickly, if at all. They intend to propel the Company to a dominant market position and be one of the top independent energy companies in the United States. In Michael Perinotti's opinion, Universal Bioenergy (OTCQB: UBRG) (OTCBB: UBRG) stands out amongst other natural gas suppliers by clearly identifying their corporate business plan, objectives, and understanding, acting on, and embracing their competitive advantages.
With their comprehensive strategies to diversify the company, Universal Bioenergy will not only be able to compete on price, but also mitigate risks in the marketplace and reposition the competition so that they can compete effectively. These strategies include;
- Acquisitions of small to mid-sized oil and gas producers and marketers to gain market share
- Acquisition of interests in gathering and transportation pipelines
- Vertical integration to manage the supply chain
- Oil and gas field development
- Owning and controlling their own gas supply
- Re-negotiating existing supply agreements
- Obtaining gas at the producers price
- Aggregation of supply from multiple independent suppliers
- Access to the capital markets
- Offer a diversified energy product mix
- Alternative energy, e.g., solar, biofuels, coal and syngas for a balanced portfolio
- Attract and retain quality personnel with incentive and equity based compensation
- Addition of new higher margin profit centers
As a result of Management's aggressive mergers and acquisitions approach, Universal Bioenergy is projected to reach $1.04 billion in revenues over the next twelve months and $1.59 billion by 2016. These revenues would help equate to an estimated market cap of $745 million to $1.11 billion in twelve months and $1.14 billion to $1.71 billion in five years, according to a Fund Request for Capital Raise Memorandum issued by Vince Guest, President and CEO of Universal Bioenergy (OTCQB: UBRG) (OTCBB: UBRG).
Universal Bioenergy, as of June 22, 2012, has a market cap of just $2.7 million with a stock price of $0.0091 per share. If Universal Bioenergy achieves their one year projected revenues and market cap, Universal Bioenergy (OTCQB: UBRG) (OTCBB: UBRG) stock would have a fair market value of about $3.00 a share, based on the current 297,210,041 shares outstanding. That is a 32,867% gain from its current price level. It's these numbers coupled with corporate strategy that leads Michael Perinotti to believe Universal Bioenergy to be one of the most undervalued natural gas investments in the market today. Not to mention recent monumental achievements by the Company:
Legislature has been debating on the New Alternative Transportation to Give Americans Solutions Act (NAT GAS Act) for quite some time and as recently as last month made some significant headway towards its passing. The NAT GAS Act would extend highly targeted tax incentives to organizations that have fleets of heavy vehicles currently burning diesel fuel to switch over to vehicles powered by natural gas. The legislation is designed to help jump start the natural gas revolution in the United States and create new jobs to aid in reversing an 8.1% unemployment rate, not to mention, increase demand for natural gas suppliers like Universal Bioenergy (OTCQB: UBRG) (OTCBB: UBRG). Even T. Boone Pickens, legendary oil investment guru, recently decided to focus more on natural gas in the clean energy space.
The bottom line is that both our domestic and global economies along with value investors are beginning to shift away from oil dependence and into cleaner energy such as natural gas. Few natural gas companies stand more poised to benefit from increased demand and price of natural gas than Universal Bioenergy (OTCQB: UBRG) (OTCBB: UBRG), in Michael Perinotti's opinion. Universal's diverse portfolio, existing distribution pipeline, extensive working relationships, and highly experienced mergers and acquisitions management team are all key points that stand out in the eye of an investor. Add to that a possible $3.00 fair market value should they achieve projected revenues and market capitalization within the next 12-36 months, and Universal Bioenergy could be the most undervalued natural gas investment in the market today.
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Disclosure: PremierEquityReports.com is not a registered investment advisor and nothing contained in any materials should be construed as a recommendation to buy or sell securities. Investors should always conduct their own due diligence with any potential investment. Premier Equity Reports is a wholly owned entity of Equities Awareness Group LLC. Equities Awareness Group has received forty thousand dollars for marketing awareness on Universal Bioenergy. Please read our report and visit our website, for complete risks and disclosures.