Opinion & Recommendation:
Sterling Investment Services is initiating coverage on the shares of World Wide Strategies, Inc. (OTC BB: WWSG) with a Speculative Buy Rating. We feel that given the prospects for the completion of the planned acquisition of Unione, Inc. the company’s shares are undervalued at the current price level. We believe that if the company is successful in completing the acquisition of Unione then the shares of Worldwide Strategies have the potential for significant price appreciation from these levels.
Company Description:
Worldwide Strategies is a development stage company. While the company does not currently have revenue generating operations, it is current in its filings with the Securities Exchange Commission and publicly traded on the Over the Counter Bulletin Board (OTC BB). The company also has a relatively clean balance sheet which makes it a very attractive and ideal candidate for a publicly or privately held company to merge with.
History of the Company:
Management of World Wide Strategies has been diligently looking for potential acquisitions for the last several years. The management has a solid track record of identifying quality companies as potential merger candidates. While the company has come close on several occasions to completing different possible acquisitions, we feel it is important to note that the private companies that the company has entered into agreements with have all been high quality companies, and they have avoided the pitfall of merging with lesser quality companies that would not have benefitted shareholders.
Recent Developments/Acquisition:
As of August of 2009, Worldwide Strategies has had several positive developments this year that indicate the company is moving from a development stage to an operating company.
- On April 7th, the company issued a press release announcing it signed a non-binding Letter of Intent to acquire the Latin American operations of NewMarket Technologies, Inc. ‘OTC: NMKT’ (www.newmarkettechnology.com). The Latin American operations of NewMarket Technologies are currently generating revenue of approximately $17 million, and is profitable.
- On April 9th, the company filed a Form 8-K with the SEC announcing that the major debt holders of the company had converted their debt to preferred shares at a price of $0.50/share, a positive sign that the management of the company views as positive the long term future of the company.
- On April 27th, the company announced the engagement of Focus, LLC. (www.focusbankers.com) as strategic advisor. Founded in 1982 in Washington, DC, Focus provides a range of investment banking services tailored to the needs of emerging growth and middle market businesses.
- On July 23rd, the company announced the signing of a Binding Letter of Intent with NewMarket Technologies to acquire their Latin American operations in exchange for preferred shares of the Worldwide Strategies. In return for the Newmarket Technologies Latin American operations, Worldwide Strategies will issue Newmarket Technologies shares of its preferred stock.
Newmarket Technologies, Inc. (www.newmarkettechnology.com)
Newmarket Technologies is a 12 year old company in the business of introducing new technologies to new markets. Since 2002, Newmarket has grown from approximately $1 million in annual sales to approximately $100 million in annual revenue with operations in Asia, South America, North America, and Africa.
Newmarket Technologies views the Latin American transaction as the 1st step in a long term plan to transfer its mature operations to Worldwide Strategies which is expected to gain a listing on a national exchange, possibly on the American Stock Exchange (AMEX), following the closing of the first acquisition. While transitioning its mature operations to Worldwide Strategies, Newmarket Technologies plans to continue to develop early stage projects within the Newmarket Technologies corporation.
Unione Consulting
Newmarket Technologies’ Brazilian subsidiary is Unione Consulting (www.unione.com.br). Based out of Sao Paulo, Brazil’s largest city. It is one of the largest metropolitan areas in the Americas with approximately 21 million people. Unione provides its clients with Enterprise Resource Planning (ERP), Business Intelligence(BI), Enterprise Performance Management (EPM), Database Administration (DBA), and Customer Relationship Management (CRM). Basically Unione provides its clients with turnkey hardware and software information technology solutions involving bundled products from major IT companies including Microsoft and Cisco Systems.
Unione Consulting boasts a client list of over 300 companies which generates over $17 million in annual revenue. Some of Unione’s major clients include: *
* Source : http://unione.com.br/clientes.asp
Brazil and South America
Brazil has a free market, export orientated economy. It is the eighth largest economy in the world, and second largest economy in the Americas. Brazil has a sophisticated technology sector. Brazil’s tech industry is involved in the development of submarines, aircraft, and is involved in space research. Brazil has a satellite launching center and is involved in the construction of the International Space Station. The government of Brazil has pursued stable economic policies that have resulted in a declining inflation rate, with the 2008 level of inflation at 4.26%; and average annual GDP growth during this decade of 3.7%. This makes Brazil an ideal place for businesses to grow and profit.
South America is home to approximately 375 million people living in 12 countries. The top performing South American countries in economic terms are Brazil, Argentina, Columbia, Uruguay, Peru, and Chile. These countries have all posted recent GDP growth rates in excess of 5% annually while managing to keep their unemployment and inflation low.
Summary
Worldwide Strategies has a management team that has proven to be successful in the past and has succeeded in locating an excellent merger candidate in Unione Consulting for the company. With $17 million in annual sales and a solid balance sheet the combination of Unione and Worldwide Strategies should allow the company to upgrade its listing from the OTC Bulletin Board to a nationally recognized exchange. The most likely exchange would be the American Stock Exchange. While speculative in nature, we feel the purchase of Worldwide Strategies shares at these levels could be very rewarding if the company succeeds in completing the acquisition of Unione Consulting.
Disclaimer: The Sterling Investments series of newsletters is produced by Sterling Investment Services, Inc. (www.sterlinginvestments.com) All information used in the production of this report has been obtained from sources believed to be reliable and accurate. Sterling Investment Services does not warrant or assume any liability for inaccuracy of the information used to produce our publications. To receive further information on these services please visit our web page at: www.sterlinginvestments.com If you would like to contact us our fax # is (678)-530-1017 Email address is: enelson@sterlinginvestments.com Sterling Investment Services may hold positions in the securities recommended or may be providing consulting services to the companies mentioned within this report. Sterling Investment Services, Inc. was paid in the amount of 25,000 restricted shares of Worldwide Strategies, Inc. common stock fee for the production of this report. While the shares Sterling received are currently restricted, Sterling may elect to sell them at any point in time once the shares become unrestricted. |
