BLSH - Cut and Run

Blue Star Health has been dancing on the edge of a 50% loss, the point at which I've learned (the hard way) to cut and run, and so I liquidated my position:


Given the current "crisis" with grain crops, legislators are beginning to question whether it makes sense to subsidize biofuels, and the concept is losing its glamor in the consumer market as well. Since it is estimate that it will take five years to ramp up grain production, it's unlikely this will bounce back in the short run.

I might look into this company again if the situation improves, if it survives - but for now, I see nothing but a downward trend.

Weekly Summary

Another week has passed ...


It's pretty clear that H3 Enterprise s (HTRE) Petel (PTEI), and possibly Blue Star (BLSH) have gone sour and are unlikely to bounce back - I may dump them next week and salvage what cash is left, and start looking for another position or two to replace them.



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Quarterly Report

Here's a graph of the portfolio's performance for the first quarter:


Since my approach is to invest in companies that have the potential for high returns in the six- to twelve-month range, it's premature to begin assessing the success of that strategy, but given the turbulence in the market, and the high degree of risk in small-cap stocks, I think it's done fairly well so far.

Of the 13 companies I've invested in, I've only made two serious mistakes (Pilgrim Petroleum and GoIP Global), though a couple of others (H3 Enterprises and Blue Star Health) are shaping up to be serious dogs, and the jury's still out on whether the remainder will live up to their potential.

Weekly Summary

Another week has passed, and there's been some improvement in my portfolio, though I still have the sense that GOGB is artificially inflated, as its volume has been extremely low. Also, it's clear to me that BLSH was a bad pick, and a few others are headed into the deep:


Some of these losses may be due to the general state of the market, and I'm deep enough in the red in my main portfolio that I don't need to take any additional capital losses at this time. Neither am I looking to invest additional cash in any of the companies on my watch list, as their performance has been consistently bad these pas few months. In all, it's a bad time to be in the market, but I'm hoping to ride it out.

Zeon Fuel Considers Biodiesel Fueled Power Plants

In a press release today, Zeon Fuels (A subsidary of BlueStar Health) announced:

[Zeon Fuels] has formed a new division to evaluate the economic viability of delivering electricity to the local electricity grid through biodiesel fueled power plants.

BlueStar Chairman, Naved Jaffrey, observed, “… It is a natural extension of our business objective to increase the awareness and pursue the expanded use of environmentally friendly fuel to meet our everyday needs."

The company anticipates the evaluation phase to be completed in 4 to 6 months at which time it will determine the best structure to implement this new business opportunity.

This strikes me as an excellent plan. The main problem with biodiesel companies is that they are focused on producing fuel for which there is no significant commercial demand, in hopes of some day being able to sell it.

By establishing power plants and entering the power industry, BlueStar is both generating a demand for its own product and diversifying the company’s holdings. It’s a very smart move.

Granted, this is an exploratory phase, and there’s no guarantee that they will actually move in that direction – but it demonstrates that they are thinking outside the box, and given the present performance of rival firms that remain pigeonholed, it’s an excellent sign.

Blue Star Health (BLSH)

Company:	Blue Star Health
Web Site:	http://www.zeonfuel.com
Purchase Price:	$0.075
Current Price:	Click Here

Blue Star Health has recently acquired Zeon Fuel, a small but growing biodiesel firm that is expanding its operations. Unlike other micro-cap stocks in the biodiesel industry, they are more than just a shell: they have wholesale and retail facilities.

Currently, the company is seeking to upgrade to the OTC bulletin board. Since insiders hold the majority of stock, it seems likely that they will avoid the usual tactics (dilution to raise funds, reverse-split to reduce shares, then more dilution) that wreck shareholder value in order to increase the stock price, and will instead pursue the proper course (i.e., grow and strengthen the company) to reach that goal.

This will probably be a short to mid-range play – my plan is to get in ahead of the pack, then dump he stock back on the market when the buzz about the “new” company has reached its peak. It’s a fairly risky move, as an uplisting doesn’t necessarily guarantee that there will be any excitement about the firm, but I expect that if my short-term strategy doesn’t pan out, the company will eventually regain ground to minimize my losses.