By: Tomas Ronolski - AllPennyStocks.com News

Wednesday, February 19, 2014

The United States and leading countries around the world are ratcheting up efforts to fight pollution and climate change. The U.S. Environmental Protection Agency has the coal industry in an uproar over stiff changes in emissions. President Obama on Tuesday flexed his executive power and ordered the EPA to develop new fuel standards for heavy-duty trucks to try and cut down on greenhouse gases. China has initiatives in place to cut down on pollution and now this week said that it plans to spend $330 billion to try and protect its scarce water resources from pollution. The list can go on and on about efforts worldwide to make changes to protect the environment. This plays into the business model of Cemtrex, Inc. (OTCQB:CTEI), a diversified company headquartered in Farmingdale, New York that provides products and services to an array of industries around the globe. Cemtrex’s German subsidiary ROB Cemtrex GmbH provides electronic manufacturing services, such as circuit board assemblies and assembled electronics products. Cemtrex just added the subsidiary to its portfolio through the acquisition of ROB Group in October.

Regarding the emissions business, the company’s Monitoring Instruments and Products (MIP) division manufactures, sells and services hardware and software for monitoring emissions of greenhouse gases, hazardous gases, particulate and other regulated pollutants, as well as Green Demand Ventilation systems, crude oil and natural gas analyzers. Through its subsidiary Griffin Filters, Cemtrex sell air filtration and other environmental control products.

With the booming oil and natural gas industry in the U.S., investors will be keen to a potential uptick in sales of the crude oil and natural gas analyzers. In September, Cemtrex inked a distribution agreement with SensEvolution, a division of BAGGI®, giving the company a suite of powerful tools to control and monitor oil and gas processing applications at a time when demand should be increasing.

Sales in fiscal 2013 (ended September 30, 2013) perked up by 12 percent for Centrex, rising to $13.67 million. A product of expanding its business model, net income slipped to $288,497 for fiscal 2013, compared to $648,199 in fiscal 2012.

Fiscal 2014 seems to be getting off on the right foot, including a $3.4 million order for ROB Cemtrex from a large European medical device manufacturer for advanced surgical components. On Wednesday, Cemtrex announced results from its first quarter of fiscal 2014, ended December 31, 2013. Net sales swelled from $2.19 million in the first quarter a year earlier to $8.96 million, an improvement of 310 percent. Net profit during the quarter was $416,552 in the latest quarter, versus profits of only $166,915 in the year prior quarter.

"This record-setting first quarter for us was due to both organic growth amongst our existing businesses and our recent acquisition of ROB,” said Saagar Govil, Chief Executive Officer of Cemtrex, in a prepared statement today.

This is still a growth story as the company executes on expansion, but judging by the report today, things are going the right direction. Shares had a nice climb in the fourth quarter of 2013, essentially tripling in value to a high of 44 cents, but have traded sideways so far in 2014. The stock price is down by 5.9 percent at 32 cents with the news today, but on negligible volume of 112,300. If Cemtrex can hold the pace in subsequent quarters, it could be looking at earning 5 cents per share in 2014, giving it an unfairly low price-to-earnings ration compared to the industry and a reason to see if interest in this little company begins to ramp-up. Proper due diligence is, as always, encouraged.

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