Icebergshares #AEG Seeing the wood for the trees.

I’ve been following AEG for a few weeks now, it’s a company that I know is familiar to a few of you PI’s.

Quite simply they make products from wood. They use cheap plentiful resources in Ukraine and ship this is fast growing developing countries such as Turkey. So far so good. They have been on a steady progressive restructuring to reduce debt payments, increase margins and grow the core market.

There are two aspects that make AEG particularly attractive as an investment at its current share price.

The first of these are the phenomenal growth rate that it’s currently achieving. AEG produced 67k tons of wood chip bio fuel in 2013, this rose to 280k in 2014 and I have been told will be around 1m tons (estimate) in 2015.

Revenue is set to increase from 8.4m in 2013 to 21.5m in 2014 to an estimated 70m in 2015.

Profit is set to be round 4-5m in 2015.

Unofficial figures for 2016 indicate revenue breaching 100m with profit of 15-20m.

The second reason for wanting to invest into AEG is a particularly good deal in Canada. AEG managed to negotiate the setting up of a new company of which is owns 45% with local tribes owning the other 55%, AEG’s role is to commercialise the forests under the agreement. 250K hectares are in the agreement with 100k been the most prime commercial. This was in July 2014 and by the end of the year full commercial evaluation was undertaken and AEG went on a roadshow across the world to find potential suitors for the forestry licenses.

Three potential suitors were found willing to pay $300m for the rights to the 100,000 hectares. A formal offer is set to be made in the very near future.

Along with the current Canadian forestry deal, there are strong rumours that further tribes within Canada have approaching AEG to help new set up further multi hundred million forestry deals.

AEG has a current Market Cap of £31m currently. It’s currently a profitable, very rapidly growing, AIM company with a strong revenue stream.

I am not a chartist and don’t really put much faith in technical analyst, but its bouncing along a break out imo ready for a rise to 8-9p based purely on continued “no news” but rapid growth expectation.

News of further Canadian deals could push it to 10-12p and news of a confirmed $300m bid would push it to 15-20p.

This is purely my opinion but there is plenty of scope to buy, hold as a long term for good profit with some risk attached to a much larger potential reward. i.e  a win or big win scenario.