I just know that plume of smoke I see rising from the mountains is a really, really bad omen. It's the heart of rainy season here in Southern California and the umpteenth straight day of sunny, dry weather.
Meteorologists say 2013 will go down in the record books as the driest calendar year on record in the state. In fact, more than 62% of California is officially in 'extreme' drought. Water sources derived from Sierra Nevada snow packs are down to a trickle.
But that's not the worst of it.
As the song says, it may 'never rain in Southern California,' but it's unheard of when drought conditions force the government to designate portions of 12 western and central states as natural disaster areas.
That's what happened recently. Oregon, Colorado, New Mexico, Nevada, Kansas, Texas, Utah, Arkansas, Hawaii, Idaho, Oklahoma and California are all in the same boat. In fact, that designation allows for eligible farmers to qualify for low-interest emergency loans and promises from the USDA that it will stand by them.
I'm not in any way downplaying the impact on farmers, consumers who ultimately pay more for short supplies, or residents in states forced to conserve water. It's all bad.
Still, none of that compares to the most lethal result of severe drought: wildfires. Parched vegetation turned kindle combusts on cue when lightning or careless campers strike. Stoked by dry winds, the flames often destroy everything in their path: hills, homes, wildlife, humans and pets. Droughts and ensuing fires drain some $14.6 billion a year from the U.S. economy.
With as little rain as we've seen the past several months, 2014 could be an expensive year.
Ironic isn't it that the element needed most to battle firestorms -- water -- is also in short supply? Not just that, chemicals dumped aerially leave toxins that damage anything spared by the fire. It's been that way for decades, and the technology is wearing thin.
Well, that's all changing thanks to GelTech Solutions (OTCBB: GLTC).
Say goodbye to the archaic combination of water and chemically toxic foam, and say hello to a revolutionary advancement that is turning the firefighting community upside down.
Back in 2008, GelTech Solutions' founder and inventor, Peter Cordani, had a hunch about a material he originally developed to protect properties from a hurricane. 'I stuck a Popsicle stick in it and tried to light it -- it wouldn't catch. Then I sprayed it on a pine tree to light the tree. I couldn't.'
Aptly named FireIce, this product can potentially change firefighting in three ways: The water-activated, powder-turned-gel sticks to surfaces so wind doesn't blow it away like foam usually does. That quality also helps keep water from evaporating before it reaches flames, meaning that it requires less H20 to smother a fire. Plus, it is non-toxic, unlike foams used today that damage whatever a fire might spare.
Patent pending FireIce can be used as a retardant to keep property from burning in fire extinguishers, pumper trucks and aerial units for wildfires.
After quite a few years of fund raising and experimentation, the $35 million company is finally gaining traction and publicity. Recently, Cordani appeared in a TV ad for the product. He coated his hand in FireIce gel then lit it with a 2,000-degree blowtorch.
That caught the attention of Josh Stossel on FOX Business Network. Stossel subsequently drilled the U.S. Forest Service for not wholeheartedly adopting FireIce, widely accepted as the most effective fire suppressant on the market today.
The U.S. Forestry Service has since added FireIce to its official 'qualified products list,' a stamp of approval that put the substance on the radar of federal firefighting agencies, the military and municipal agencies. That designation also made FireIce much easier to sell to private companies, universities, research labs and homeowners.
No question Florida-based GelTech makes a winning product, or should I say, products. The company is by no means a one-trick pony. Along with FireIce it markets several other drought-fire related products, including Soil2O and SkinArmor.
GelTech's newest launch, the Emergency Manhole FireIce Delivery System (EMFIDS), developed with Con Edison, will be marketed to utility companies worldwide. It delivers a mixture of FireIce and water into a manhole to coat the ladder and the worker in case of an explosion or fire during routine repairs or maintenance.
That's why I love this company. It has taken one winning product and rolled it into a wildly productive pipeline attached to potentially huge profits. I think it's just a matter of time before GelTech turns the corner. For now, though, we must deal with a little good, bad and ugly.
In 2013, it increased cash reserves by 7%. Revenues grew 25.37% from $419,500 to $526,000 year-over-year. Plus, by reducing costs of goods sold and administrative expenses, losses dropped from $7 million to $5.2 million over a year.
GelTech is clearly headed in the right direction. However, it is very much a penny stock, trading at just $0.90 per share. That's after going from a low of $0.37 in January 2013 to a high of $1.68 in August (a 332% gain) and then back down.
The ups and downs experienced by the stock might make roller coaster aficionados sick to their stomachs, but GelTech's products are poised to revolutionize firefighting on a national scale... and right when we need it most.
Not a stock for the faint at heart, but definitely a company with products worth believing in, this could be a very profitable year for GelTech and its investors.
Risks to Consider: At just $0.90 a share and thinly traded, volatility can be expected considering the company has yet to turn a profit with growing but insubstantial sales figures as of today. Though this company's products could revolutionize a big industry, you should always do your own homework before purchasing any stock.
Actions to Take--> The stock reached a 52-week high of $1.75 in March 2013, and I think it will be heading back in that direction over the next quarters. Ninety cents is a decent entry point, but buy small increments until sales and revenue pick up.
