Blue Earth Inc (OTCMKTS:BBLU) Take A Break

We covered Blue Earth Inc (OTCMKTS:BBLU) last week and we said that they have managed to achieve something quite significant – a full week without even one red session. Unfortunately, we might have jinxed them.

Our article went online before trading commenced on Thursday and by the end of the day, BBLU had lost around 6% of their value. Friday was even more depressing when we saw significant volume and a further drop of around 7%. It might not sound like much but when you take a look at the numbers you see that in no more than two days BBLU‘s shares went from $3.74 to $3.25 and at one point, during the trading frenzy on Friday, they reached an intraday low of $2.15.

We can’t say that we’re surprised by the ticker’s odd behavior, but we’re sure that the people who really trust the company are probably worried. And on the face of it, it’s not too difficult to put quite a lot of faith in this particular stock.

Certainly, when you compare them to other penny stocks, you will see that BBLU do seem to be ahead of the competition. Take Eco Building Products Inc (OTCMKTS:ECOB), for example. Just like BBLU, ECOB are a “green” small cap venture, but while BBLU have managed to generate nearly $3 million in revenues for the first quarter of 2013, ECOB have registered just $1.7 million. That is probably why BBLU‘s market value and price per share are quite a lot steeper than ECOB‘s. Or is it?

Well, as we wrote in our previous article, there are some other factors that play a role in the unusually high price that we’ve seen from BBLU. There has been a pump that’s been running for almost a year now and during the last couple of months we have seen a massive surge in the price. It would seem, however, that some people were trying to draw the investors’ attention to BBLU even before SmallCapStockPlays started sending their emails.

While we were digging around to find something interesting around the company we stumbled upon this interview with Mr. Gary Eelman (one of BBLU‘s directors) uploaded by Red Chip Companies. The interview itself was published in December 2011 and naturally enough, Red Chip didn’t do it for free. On their website we read that they have received a monthly fee of 50,000 restricted shares for twelve months worth of coverage on BBLU.

Although it’s quite old, we still decided to watch the whole interview and see what the director’s thoughts were back in 2011. Towards the end of the conversation, the host asked his guest about the plans for 2012 and Mr. Eelman said that they have set themselves a target for the annual 2012 revenues amounting to at least $35 million.

We got curious and decided to see how realistic this target had actually been and when we opened the 10-K for the fiscal 2012 we were a bit underwhelmed to find that they have managed to register less than $10 million. As we mentioned, Q1 of 2013 resulted in just under $3 million in revenues which means that while the current fiscal year is shaping up to be better than the previous one, they will probably still fail to reach $35 million benchmark. Then there’s the question of profitability. We can see that, try as they might, they have failed to register even a penny in profits ever since the beginning if they don’t manage to do it soon, shareholders might start to get a little agitated.

They could also get annoyed by the ongoing promotion lead by SmallCapStockPlays, especially if the ticker experiences similar losses to the ones we’ve seen from Medical Marijuana Inc (OTCMKTS:MJNA) in recent months. SmallCapStockPlays took part in the pump for MJNA back in February and as you can see from the chart on the right, the performance since then has been rather dismal.

That’s why, careful consideration of all the risks might not be a bad idea before investing any money in BBLU.