Ecosphere Technologies Continues Downhill for 8th Consecutive Month (ESPH)

Even after two consecutive profitable quarters and a listing in the 2012 Artemis top 50 Water Tech companies, diversified water engineering and services company Ecosphere Technologies (OTC: ESPH) is unable to impress the market and continues to slide towards its 52-week low of $0.33 per share.

Ecosphere is primarily focused on recycling water within the oil and gas industry. The company, with its cost effective and patented “Ecosphere Ozonix” process technology, assists major natural gas drillers in the U.S. to more efficiently recycle wastewater produced as a byproduct of drilling. Ecosphere also leases mobile frack water filtration units.

The Florida-based company made waves when the fourth part of “What to buy in 2012”, published by Seeking Alpha on January 12, 2012, recommended Ecosphere’s stock. Two days later, The Street published an article highlighting the possibility of a spin off or sale of the energy division subsidiary. Ecosphere owns less than 100% of this subsidiary. The article also underlined the fact that Ecosphere’s technology can be applied to any water purification need.

On January 27, 2012, Seeking Alpha published another article speculating that Ecosphere’s Ozonix patent may end up as a big winner. Following these three reports, the stock price rose to $0.75 in less than a month’s time from a low of $0.45 per share.

On May 10, 2012, the company reported net income for the first fiscal quarter of 2012 at $400,000 compared to a net loss of $3.8 million in the corresponding quarter last year. Ecosphere also reported a $6 million increase in revenue to $8.3 million in the first-quarter, owing to the agreement with Hydrozonix. The stock price had come down to $0.54 by this time from a peak of $0.75 in the month of February 2012.

On August 2, 2012, the company reported its fiscal 2012 second-quarter results. Ecosphere’s revenue grew 264% year-over-year to $8.6 million compared to $2.4 million in Q2 2011. The second quarter 2012 net income was $500,000 compared to a net loss of $1.86 million in the previous year’s corresponding quarter.

The company also reported unrestricted cash of $2 million and a reduction in debt by approximately $500,000 during the second-quarter. Notwithstanding the results, the stock price had fallen to $0.47 per share from $0.54 three months ago.

On September 12, 2012, the company presented at the Brean Murray, Carret & Company 2012 European Global Resources & Infrastructure Conference. The next day, Ecosphere announced that it had been chosen for the 2012 Artemis Top 50 Water Tech Listing.

Charles Vinick, Chairman and CEO of Ecosphere Technologies, commented, “The Artemis Project’s selection of Ecosphere Technologies as a Top 50 Water Company for the third consecutive year is a tremendous honor and we are proud to be recognized for our innovations in water treatment for the oil and gas industry.”

The news of Artemis’ selection failed to turn the fortune of the stock. The stock price showed no recovery and had come down to $0.42 by then. Most traders who actively participate in forums such as investorshub are concerned about the consistent product sales prospects and high market capitalization. Such an apprehension reflects deeply in the stock price. The traders keep their fingers crossed and wait for the third-quarter results.

Ecosphere ended the day at $0.38 per share, down $0.015 or 3.8% on a volume of 319,150 shares.

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Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.