CDZI

It’s no secret that I love small stocks, and for similar reasons to why I love options trades.

They’re capable of outsized moves — sometimes jumping 30%, even 50% in a short period of time… heck, I even alerted one recently that made a triple-digit move a few hours after I told you about it.

Small stocks can defy market trends, making it possible to pick up a win even on the bloodiest of days.

But mostly I just enjoy learning about up-and-coming companies — their business models, innovations, and unique selling propositions.

After writing about probably hundreds of them over the years, the thing I find frustrating is that while some companies are very cool and have a lot going on, they really aren’t good at telling their story.

Whether it’s clunky websites, dated investor materials, or just webs of jargon and corporate-speak that are impossible to penetrate, some companies seem like they’re actively discouraging investors.

So it’s refreshing when I come across a company that does a great job of transparently laying out their business and vision.

The company I’m sharing with you this morning tells its story better than almost any small company I’ve come across, and it’s a really cool one. 

Do yourself a favor and pull up Cadiz Inc. (CDZI) on your trading platform right away.

On the technical side, you’ll see that it has been sitting on a much higher plateau since May, and that compared to its April low, it’s now trading 43% higher, even after this week’s pullback…

Last month, it even popped 20% in a single day.

Right now, it’s trading at the low end of its recent range, with a lot of tested potential to the upside.

I love this right now because it has shown a clear ability to run much higher from the current level, which you can see has acted as a strong support line.

Now, if the stock closes under that $3 support, I would certainly put the brakes on my excitement and wait for a better opportunity again.

On the other hand, looking at the chart above, I don’t see why $3.50 or even near $4 would be out of the question if things work out well.

If (or when) market sentiment rebounds, I think CDZI could be a big beneficiary.

As for the business itself, CDZI is a Los Angeles-based water infrastructure company that was founded in 1983 in Cadiz, California.

Cadiz — the company’s namesake — is an unincorporated town in the Mojave Desert, an area so arid that it was used as testing grounds for the Mars Rover.

On the surface, it’s an unusual place for a water infrastructure company…

Except that beneath the surface is an aquifer that stores 30–50 million acre-feet of freshwater, greater than the full capacity of nearby Lake Mead — America’s largest surface reservoir.

The company owns 45,000 acres, 9,600 acres of which it calls Cadiz Ranch, and is the largest agricultural operation in San Bernardino County.

For 40 years, CDZI has operated the agricultural development, featuring citrus, grapes, melons, peppers, and squash.

But CDZI’s biggest aspirations are to provide clean, affordable drinking water to nearby communities, and it has been partnering with water agencies, local governments, and community leaders to pull that off.

The company lays out its mission in an epic, cinematic video that I highly recommend watching.

The idea is to intercept the flow of water as it travels from nearby mountain ranges and passes through nearby Fenner Gap — before it reaches hypersaline dry lakes, rises to the surface, and quickly evaporates.

From there, CDZI plans something it says will be “first in the world” — a conversion of oil and natural gas pipelines to convey the water.

There is already an extensive network of pipelines nearby (here is a helpful, interactive map).

In 2014, CDZI purchased a 220-mile section of pipeline (the “Northern Pipeline”) that runs next to Cadiz’ aquifer that it says can be “easily converted to safely and efficiently move water.”

The pipeline “will connect not just to water-scarce communities along its path, but also to the State Water Project’s California Aqueduct, a major source for all southern California.”

Additionally, the company is planning to build a 43-mile “Southern Pipeline” which will connect to the Angeles Tunnel aqueduct branching off the Colorado River.

These pipelines can be used not just to supply water, but to store it.

Southern California has notorious drought problems, and the Cadiz aquifer has room to store at least 1 million acre-feet of water in times of excess, making it “the largest new groundwater storage bank in the Southwest.”

To put that in perspective, that’s enough storage to supply two million households.

On August 15, the company announced “that it has secured water purchase agreements for 85% of capacity of the Company’s ‘Northern Pipeline.’ “

That amounts to 21,275 acre-feet of water per year, and the company said it “expects to receive net revenue of approximately $850 per AF in 2024 dollars for water purchased under the agreements.” That amounts to more than $18M per year.

The company said the agreements “will enable the Company to secure third-party capital to begin construction of the [Northern Pipeline] Project in 2025 as planned” and that initial water delivery could be as early as 2026.

The company also noted that it would be contracting for water delivery via the Southern Pipeline later this year, and that it hopes to begin construction on that in 2025.

The announcement resulted in the single-day, 20% jump in stock price I mentioned above.

Beyond agriculture and water supply, in 2022 the company acquired ATEC Systems, a water filtration company, for about $2 million.

The LA Business Journal said that the goal was “to secure a consistent revenue stream for Cadiz” and indeed, this year the company is projecting $15 million in revenue from ATEC.

The company has received orders outside California, including from Oregon, Wisconsin, Nevada, and Washington state.

In July, InvestorPlace said CDZI was one of “3 Under-$10 Stocks With the Potential to Make You a Millionaire.”

And the firm B. Riley Security rates CDZI as a “Strong Buy” right now.

I’m truly just “scratching the surface” of this company, and I really encourage you to look into them further. Here are a few things to get you started:

 

 

Always approach your trading in a responsible manner. Trading is very risky, and nothing is ever guaranteed, so never trade with more than you can afford to lose. 

Please read the full disclaimer at the bottom of this email as well so you are aware of additional risks and considerations. Always have a well-thought-out game plan that takes your personal risk tolerance into consideration.

I am expecting big things from CDZI. You should make sure it is on the top of your watchlist today.

To Your Success,

Jeff Bishop

P.S. Make sure you join me and over 1000 traders in the Market Master’s trading room today for live trading signals and education. You can access it at no cost right now. 

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*Just so you know, what you’re reading is curated content for which we have received a monetary fee (detailed below) to create and distribute. Let’s be clear that investing can be quite the roller coaster as stock prices can have wild swings up and down, so consider those crucial risks before you ever consider trading anything we discuss. Make sure you check out our full disclosure down below for the details on how we were paid, the risks, and why these results aren’t what you’d call “typical.”

Just a quick heads up about this ad you’re reading—as we’ve said, even though we like the company referenced above, and all the facts we discussed above are true to the best of our knowledge, we are running a business here. To distribute this information and help offset the costs of maintaining our large digital audience, in advance of writing the content above, we received twenty five thousand dollars (cash) from West Coast Media for advertising Cadiz Inc Inc for a two day marketing program on September 5-6, 2024. This was paid by someone else not connected to Cadiz Inc Inc. It might be obvious, but whoever paid for this might own shares and is likely looking to sell some or all of them at any time after we send out this information, which might affect the stock price. We may also buy or sell shares in the company at some point in the future, although neither RagingBull nor its owners own any shares of the company at this time. Also, keep in mind that due to the sheer size of our audience, if even a small percentage of people decide they want to buy this stock, it could potentially boost interest enough to hike up those share prices and cause a temporary spike, and the opposite is possible as our program ends, though that is not always the case.

Now, diving right into Cadiz Inc might sound exciting. But remember, it’s like venturing into the wilderness—be aware that there’s exceptional risk involved in trading. This isn’t small potatoes we’re talking about; you could lose every dime you put in, so always carefully think about what you’re doing. That’s why they call this trading, after all. We’re shining a light on the good stuff about the company here, but it’s on you to do your homework, make your own calls, and determine a plan for your own trading, hopefully with the help of your professional 1nvestment advis0r.

Oh, that brings us to another crucial point—we’re not here to tell you (or even recommend) what you should do with your hard-earned money. We’re simply sharing our non-expert thoughts by highlighting some companies we like that could use some help telling their story to more people. We’re obviously biased in our writing. We’re not here to dig into anything that may be negative about the company; this is advertising, after all! Also, keep in mind that if we make some predictions about the future, these are technically known as “forward-L00king statements” under the securities acts, so take those with a grain of salt. As with all forecasts, they’re not set in stone, often wrong, and we certainly can’t know where the Company’s earnings, business, or share price will be tomorrow or a year from now.

Everything you read from us is all for your education, information, and possible entertainment. While we believe the info is reliable and accurate, we can’t wear a cape and guarantee it. Before you jump into anything, make sure to talk it over with a pro—someone you trust who’s licensed to give you real advice. To be clear, 

Neither Raging Bull nor its owners, employees, or independent contractors are registered as a secur1ties br0ker-dealer, br0ker, 1nvestment advis0r (IA), or IA rep’s with the SEC, any state securities regulat0ry authority, or any self-regulat0ry organization.

So, that’s the scoop! If you’re intrigued and want to learn more about the companies we talk about, hit up the SEC’s website to dig into their filings and see the full picture.