Imperial pick for imperial portfolio !

Introduction

We just issued our monthly report for August 2023 showing two consecutive impressing months for our portfolio in July and August. It is critical at this stage to protect and continue performing for the remaining of the year. We need to continue our performance ahead of global market performance. We did our research and found new pick worth to be added to our portfolio. It is IMPP, Imperial Petroleum from Greece ! IMPP is trading in Nasdaq and it is the 2nd pick from Europe following AFLYY after we are having 3 picks from US (MQ, CALM & AAP), 3 picks from Asia (Baba, DNFGY & STG) & 1 pick from South America (SMTSF).

Imperial Petroleum Inc is a Greece-based international shipping transportation company and founded recently in 2021. The Company specialized in the transportation of various petroleum and petrochemical products in liquefied form. As of today, the Company’s fleet consists of 9 vessels (oil product and crude oil tankers).

IMPP bad factors as start !

It will be usual to start mentioning the good causes for buying IMPP, but actually any investment has its bad and good factors. So, lets start with what is bad about IMPP. First, the oil tankers business is highly volatile. There will be periods of good profits and periods of losses because of high competition and global market economy weaknesses. Currently the demand of oil is increasing regardless of all global efforts to minimize oil demand. As per trusted oil reports, the oil production will continue recovering and increasing from Covid periods till 2028 where the production can start declining. For us, 5 years is sufficient investment period. As the demand going higher, the oil transportation will remain busy and profitable. Below is the worldwide oil production showing that it was wise to found IMPP in 2021.

Another factor is the young foundation of the company which is covered by experienced management. The small you are, the less control you have in the market. The good thing that the company was able to turn profitable recently indicating that it will survive in this competitive market conditions. But that need to be under monitor.

Another factor, is the latest message from Nasdaq to company of possible delisting because it was trading below $1. That was also covered by reverse split from the company.

Latest factor could be the announcement of the company of selling 17 million shares in Aug 2023 for $2 while the share was trading above $3. That drive the stock to crazily drop from $3 to $1.18 in just one week during last month.

IMPP good factors

We will start from the bad factors ! The announcement of selling 17 million shares at $2 had created a wonderful opportunity for new buyers. $1.18 was the lowest traded price from the day the company traded and currently recovering and trading at $1.35 which still very attractive comparing to $3 at beginning of August or $34 when company start trading on Dec 2021. Below is the price charts from Beginning of the year and another for all historical prices from 1st day in Dec 2021 from Google Fiancne.

IMPP impressive financials

All of above was not the drive to buy IMPP. We were searching to duplicate the success of STG and with the latest drop of IMPP, it entered nice investments rations and measures. For example, IMPP is trading in PE ratio around 0.4 which is really crazy. Even if the price gone 100% from current, the PE will remain below 1 which is again crazy numbers.

Above was driven from the IMPP turning to profitability after increasing its fleet to 9 vessels. Below is the yearly profits in USD from Google Finance.

Another good factor is the book value. Imagine the book value is $19 and the share is trading at $1.35. It is very rare to see profitable company trading at PE below 1 and price to book value below tenth. It is really amazing investment measure.

To add more positivity, the company almost have no debt ! All its fleet vessels from its own cash. This avoid the market worries of increasing of interest rates and it is the opposite the company has good cash and gaining from that.

One good factor is the high trades in IMPP. It is easy to find one million shares traded a day which is not the case with many small cap companies we have. Below table is a comparison between IMPP and the best performing share in our portfolio STG.

	Current PE Lowest better	Book value $ Highest better	Daily traded shares Highest better	Age in years Highest better
STG	1.4	0	10,000	20
IMPP	0.4	19	1,000,000	2

Conclusion

From above, we can conclude that IMPP is fit in our portfolio conditions of expected double within 2 to 3 years. Actually IMPP was trading above $3 last month comparing to $1.35 now, a double under radar. Last year in 2022, IMPP was trading at $46 ! Financials of IMPP is even better than STG now and similar to STG when bought first time. We had entered IMPP this week and just included to our portfolio and will keep monitoring all Picks and new opportunities and update any increase accordingly. By end of this week, below is our current portfolio conditions.

#	Stock	%
1	STG “Sunlands Technology Group”	68.5
2	BABA “Ali Baba Group”	7
3	IMPP “Imperial Petroleum”	7
4	AFLYY “Air France KLM”	4.5
5	AAP “Advanced Auto Parts”	4
6	MQ “Marqeta”	3
7	DNFGY “Dong Feng Automobile”	2
8	SMTSF “Sierra Metals”	2
9	CALM “Cal Maine Foods”	2