Mogul Energy International, Inc. (OTC: MGUY) is a nanocap company with large-cap ambitions. And by capitalizing on and maximizing the massive revenue-generating opportunities in the logistics and transportation sectors, positive results from its efforts could post sooner rather than later. MGUY management thinks so. After completing its accretive acquisition of the “Flora” group of companies, MGUY expects its revenues to surge over 164% from their roughly $70 million in 2022 to $185 million by 2025. That’s not all.
Mogul also expects EBITDA to jump from $3.6 million to $8.1 million during the same period, a 125% increase that does more than create additional and sustainable shareholder value; it supports the case for considerable upside potential in the stock. Share price appreciation is already a trend. Since last week, MGUY shares are higher by over 7%, a decoupling from the broader NASDAQ market, which is looking for a consistent direction.
Still, while MGUY’s recent move higher is impressive, the better news is that it could be the precursor to an even more significant upside, fueled by completed financing that positions MGUY better than ever to do more than maximize targeted opportunities in the transportation and shipping industry; they can lend a hand to revolutionize it.
Mogul Energy Has The Right Ingredients To Grow Quickly
That’s an aggressive forecast. However, as an agile and adaptable company in an expanding logistics sector, MGUY can provide services many others can’t. That’s led to building its client base and putting new ones in sight by establishing industry relationships that understand its value from delivering “gold standard” services in a sector mired with mediocrity.
That distinction matters, especially with MGUY clients entrusting them to deliver up to millions of dollars worth of perishable and time or temperature-sensitive cargo, including floral, produce, plants, dairy, poultry, meats, and even dry high-value commodities. For MGUY, providing those niche transportation, logistics, warehouse consolidation, and distribution services has led to them growing faster than many might have expected. In fact, if MGUY reaches its revenue goal of $185 million by 2025, its market cap and share price could increase exponentially.
Again, that’s not overzealous speculation. MGUY shares have traded as high as $0.42 during the past 52 weeks, 1642% higher than its current price. Considering a trading float of only about 11.1 million shares, news-based traction, which is expected, could send prices on a trajectory to re-claim that high. In other words, after assembling the pieces to contribute to breakout 2024 growth, its $0.024 share price on Friday presents more than a ground-floor investment proposition; it’s a bargain basement one.
Right Sector, Right Time, Accretive Acquisitions
But windows of opportunity do close. That includes the one exposing the MGUY valuation disconnect, which fails to appraise the entirety of MGUY, especially the value of its accretive acquisition of the “Flora” group of companies: Florida Beauty Flora, Inc., Florida Beauty Express, Inc., Floral Logistics of California, Inc., and Tempest Transportation, Inc. This acquisition establishes MGUY’s place as a contributing and valuable player in the specialized transportation space by providing refrigerated trucking and logistics services for companies in floral, plant, food, and other industries needing time-sensitive, temperature-controlled segments through the supply chain. Not just in its local market, either.
Moguls’ acquisition of Flora fortifies an already strong presence in the refrigerated transport and logistics industries in the United States, enhancing Flora’s ability to transport and warehouse products nationwide and, as importantly, facilitate the entirety of the client’s supply chain cycle. In more specific terms, the acquisition made an already excellent company better. Flora and its subsidiaries are not newbies to the logistics space.
The company was established in the mid-1980s and has grown through opportunities presented to expand its business reach beyond its initial core focus of floral transportation. As a mature company with almost four decades of experience, the company is a virtual one-stop shop to supply primarily refrigerated long haul, regional and dedicated transportation, and logistical services for the floral and plant industry. And it’s not a small operation.
A Large Fleet Of Assets In Service
Today, Flora manages approximately 230 trucks and 320 trailers across Florida, Tennessee, and California. The Florida location is one of the largest cold storage facilities in the Southeast, with roughly 200,000 square feet of dedicated storage for fresh-cut flowers and produce. The company employs about 300 people, which it expects to double in size by 2025 to meet its forecasted growth.
To maximize efficiencies and lower overhead, the company highlighted integrating new software operationally and in the fleet to heighten its technological advantage and facilitate revenues falling faster to its bottom line. As noted, revenues are expected to nearly double to $185 million within three years. And not from just current value drivers.
MGUY expects to continue its growth through an acquisition strategy that adds accretive revenues that benefit from a business model designed to maximize income. In other words, taking the steps to ensure revenues’ ultimate contribution is to increase shareholder value. They also plan to engage new credit facilities to expand their fleet of trucks and warehouses, simultaneously replacing older trucks and trailers with newer asset-light models. To make the most significant impact from a financial perspective, Flora’s information technology staff will focus on integrating automation and technology to reduce overhead through algorithms that will modernize its operations and expedite new fleet acquisitions into service.
Positioned To Surge From Groundwork Completed
Combining assets with potential, MGUY is in a sweet spot of opportunity. And they can capitalize on changes to supply chain models that resulted from the pandemic. Those changes were needed, and although it took a global pandemic to get people to respond to that need, global logistics, warehousing, and distribution infrastructure industries have a new and better standard from which to serve. Those companies early to adjust to the changing logistics tide will likely benefit the most, including microcap MGUY, which, like the sector as a whole, could earn considerable new market share by providing specialized services to market segments needing cold storage and delivery services.
Indeed, MGUY is presented with an enormous opportunity. The Perishable Goods Transportation market opportunity is expected to reach $6.3 billion by 2026, resulting from the growing demand for organic, fresh foods and beverages, which has led valuations of home-delivery companies Doordash (NASDAQ: DASH), GrubHub (NASDAQ: GRUB), and Blue Apron ( NASDAQ: APRN) to surge since their market introductions. That’s just the food and beverage part of the equation. The fresh flower business in the U.S. presents an over $35 billion market opportunity. And as companies like 1-800-Flowers (NASDAQ: FLWS) continue to expand their business reach, that already significant market will likely follow that lead.
Thus, with a strengthened balance sheet and performing assets in a red-hot logistics sector, the path of least resistance for MGUY shares is likely higher. Not only because of an expected surge in revenues but also from the company streamlining its operations to ensure that each dollar earned contributes to creating sustainable shareholder value. That combination is indeed a key ingredient to a recipe for success. And for MGUY and its investors, it may generate some tasty returns.
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