Volatility Surging on Microcap Service Team Inc’s (OTCMKTS:SVTE)

Volatility Surging on Microcap Service Team Inc’s (OTCMKTS:SVTE)

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Service Team Inc (OTCMKTS:SVTE) is a electronic warranty compliance and truck manufacturing company that has caught the market’s attention. Volume surpassed 600 million on multiple days this month, so let’s take a deep dive into this company and see if we can trace out where this volume is coming from.

SVTE has a marketcap of 243,639k with 348M shares outstanding. The numbers and press releases don’t exactly paint a clear picture, but there could be some imminent news on the horizon.

Service Team Inc (OTCMKTS:SVTE) acquired Trade Leasing, Inc. in 2013 for shares of its common stock (Now known as Delta Stag). That aspect of the business consists of manufacturing, maintenance, and repair of truck bodies. The trucks are typical box work vehicles based on descriptions in their 10-k.

In May, the company president was changed. Mack Clark decided to continue the work of Brian B. Clark, the previous president, who resigned on April 1, 2017. Mr. Clark brings 27 years of service with Service Team of Professionals, a company providing water damage and restoration franchise that he founded. Additionally, the company filed the following announcements to the SEC website. On June 8, 2017, it was noted that the issuer of some of the convertible notes that the company holds is Tangiers Investment Group, LLC, but not Tangiers Capital Group. We believe that the fact may have some implications on the share price. Thus, we noted it here.

In recent news, SVTE released Q1 earnings. SVTE recorded $897,084 in sales and had a gross margin of $156,261. However, the net income applicable to the common shares was negative. The most important expenses were the cost of sales, and the General & Administrative Expenses. Additionally, it was noted that the company had 168,671,089 shares issued and outstanding as of February 28, 2017, as well as 100,000 preferred stock issued and outstanding as of February 28, 2017. The good news for retail investors is that the preferred stock is not convertible. Thus, there is no dilution risk derived from this security.

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However, the company is on a downward trend if you look at its curve over the course of a year. The company’s news was much more positive last year. SVTE was seeing record sales and numbers after their move to Fullerton, California. The company added MCV Companies this time last year funded by cash and stock.

Here was a quote from MCV about the past deal:

Virgil Enriquez, Secretary of MCV stated: “MCV Companies Inc., is a full service landscape contractor. We offer conceptual drawings and complete construction services. MCV is committed to taking the client’s vision and making their dream become a reality. As a premier landscape contractor in San Diego County we surround our customers with the most knowledgeable professionals. Our team has over 25 years of experience in the industry. MCV creates individuality in each of their client’s custom outside living spaces. Throughout construction we maintain constant communication with all partners involved. Customer service and constructing it right the first time is always our top priority.”

Service Team Inc (OTCMKTS:SVTE) is a hard company to get a bead on. There is a strong possibility a buyout could be afoot or another acquisition. These shares are volatile for unknown reasons and I would caution investors to watch out because there is a foggy air surrounding the company. We hope the next few weeks will clear this up and we will be able to see more reasons for the increase in trading. For continuing coverage on shares of SVTE, as well as our other breakout stock picks, sign up for our free newsletter today and get our next hot stock pick!

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