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The Upward Trend In Lig Assets, Inc. (OTCMKTS:LIGA) Has Legs

The Upward Trend In Lig Assets, Inc. (OTCMKTS:LIGA) Has Legs
Written by
Jarrod Wesson
Published on
March 12, 2018
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Lig Assets, Inc. (OTCMKTS:LIGA) keeps hitting all the time records. After a rollercoaster move seen in 2017, it is again ticking higher and crossing the 52-week highs seen in April 2017 thanks to continuous revenue growth of the company. We will provide our new due diligence on this name in this piece, but first, have a look at the most recent price action:

2 years chart for LIG

In January 2018, the stock was able to cross the previous resistance of the $0.074 mark before retracing back to $0.0057 in February. Then, a similar momentum again pushed the stock to new highs. From here, the upside is really unlimited. Keep in mind that last time the stock touched these share price levels in 2013.

On the downside, if the stock losses the $0.0074 mark, then the stock could easily retrace back to $0.0054, which may be a great entry point. Undoubtedly, the stock price could go back to $0.025, but we don't see this rapid move very likely.

Image from the Website - Lig Assets, Inc. OTCMKTS:LIGA

Before we review what's LIG doing to excite the market, let's check again how it enhances value to the shareholder. More information can be found in our previous piece "LIG Assets Inc (OTCMKTS: LIGA) On A Bull Run."

Business

LIG Assets, Inc. is presented as a multi-faceted worldwide investment company that focuses on real estate, media, and the retail industry. It is focused on exclusive green, renewable energy and sustainable homes, living systems, technologies and components to be utilized in the residential and commercial real estate acquisition and development projects currently underway, and individual product sales. Additionally, it is also interested in other sectors and may expand via acquisitions, or joint venture agreements. It was founded in 2008 and is headquartered in Carthage, Tennessee.

The following are the announcements that, in our view, made the stock take off in 2018. Take into account that the company has been taking steps in the right direction since 2017, and it will be difficult to find one single announcement that explains the run.

The new contracts and new projects

The first easy indication of company growth that we could find was a large number of contracts recently signed. Many of them were released right before the end of 2017. Thus, they could have excited the market and created the stock run.

On November 9, 2017, the company released that a wholly-owned subsidiary had secured two steel framing contracts in the state of Texas and received $81,170.29 in initial deposits for the projects. Additionally, the company also noted to be working on steel framing bids for additional residential and commercial development projects having worth over $3,000,000.00 in the states of Texas, California, Tennessee, and Florida. This is an interesting catalyst for the stock. We will check additional announcements regarding those bids in the new year 2018. If new agreements are confirmed, the share price could run more.

There is another remarkable contract signed some months later; in February. It is the joint venture agreement with real estate franchise leader EXIT Realty Elite to buy a 60.19-acre tract along the hillsides of Brentwood, Tennessee. The project is large and quite ambitious for a company like LIGA. Read the following words:

"Total projected land value once complete infrastructure is in place with respect to excavation, utilities, roads etc., for the 30 acre land parcel alone will appraise at a minimum of approximately $8,100,000.00. LIGA's parcel border's another developer's parcel, Stonecrest of Brentwood by Turnberry Homes with estate homes currently selling from $800,000 and up which only improves and enhances the surroundings for our unique subdivision." Source

There is more.

On January 16, 2018, the company also created a new wholly-owned subsidiary, LIGA Homes, based in Nashville, Tennessee, to focus on the development and sales of primarily residential homes and communities. Taking into account that the more products the company sells, the more revenues it could receive, this is very beneficial. Additionally, the combination of this new company with LIG Developments, which is another subsidiary, has created a powerful vertical integration, which will increase LIGA’s profitability.

Promises to shareholders: no reverse split, and no share count increase

There are other two interesting features of LIGA. Firstly, the company promised to maintain the level of shares outstanding, thus shareholders don't have to fear about stock dilution. These were the terms mentioned by LIGA:

"We are committed to the existing share structure; the total authorized common share count will not increase above the current level of 2.4 billion shares for at least two years or December 31, 2019 unless the Company’s common stock share price trades above .05 per share for at least 30 calendar days." Source

In addition, given several conditions, there will be no reverse split of LIGA common stock before December 31, 2019. This is another very important commitment, which shows that LIGA will not use unfair tools to enhance shareholders value.

Revenues keep increasing

On February 5, 2018, the company announced $450,000.00 in cash deposits for the month of January 2018. In addition, the company is expecting a good amount of revenues, which confirms that the efforts are finally paying off. Please keep in mind the following important words. The optimism is at its highest level:

"LIGA anticipates this trend of increasing monthly revenue growth continuing steadily for the foreseeable future and well beyond 2018 as the Company continues to move forward with its business plans and achieving its objectives." Source

Conclusion

Currently trading with a market cap of $19 million, LIGA is an exciting story among small caps. With the management telling right now that a Tax and Auditing firm is preparing LIGA’s filings for the years 2017, 2016, and 2015, the next months could be frenetic in the stock exchange. If the number of assets and revenues released are larger than expected, the stock could run. We will be ready to assess the new information, but we encourage readers to do the same. Remember that those making the hard work are the only ones who will get paid.

To sum up, there is a lot to like on this name.

Be sure to check out our coverage on LIGA!

Disclosure: We have no position in LIGA and have not been compensated for this article.

Image courtesy of Chris Griffith via Flickr.

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