This low-float alert is trading on a bottom'd out chart, and appears to be primed and ready for a monster breakout.
UMAX Group Corp.:
Is operating in a red hot housing sector
Has just completed a major acquisition of Home Foam Corporation
CEO anticipates strong revenue growth in 2021
Has an extremely thin float of just 9.75M
About the Company
UMAX Group Corp. is a Nevada corporation, is a publicly traded company that trades under the symbol "UMAX". Currently, UMAX has one operational subsidiary, Home Foam Corporation (Nevada Corporation), which specializes in architectural foam ( EPS ) design products. This includes columns, caps, bases, medallions, railings, balconies, balustrades, shutters, window trims and sills, crown moldings and interior & exterior moldings. Additionally, they provide ornamental foam pop-outs such as window treatments for outside of new homes for stucco subcontractors and plaster companies. Additionally, Home Foam cuts foam for packaging inserts for shipping companies as well as geo-foam for highway and road development. The company also manufactures shutters for some of the largest regional home building companies for newly constructed residential homes. The company currently operates a 12,500 square foot warehouse located in Las Vegas, Nevada. The warehouse provides services for over 50 customer and currently has 13 full-time employees. Home Foam has plans to participate in the home building market in the Southwest Unites States during calendar year 2021. The company will eventually develop its own patented building system using EPS Foam products and a patented stucco-based coating. The coating insures higher R-values factors than traditional wood-built residences thus lower energy monthly cost. The company is also continually searching for companies that would expand the footprint in the home building industry for partnerships of acquisition.
UMAX CEO Delivers End Of Year Update. Provides Outlook For 2021
With the current client base of Home Foam, it is anticipated that UMAX will generate approximately $2.0M to $6m USD in revenue in calendar year 2021.
Mr. Fletcher (President and CEO of the Company), states…"The calendar year 2020 has brought positive changes to the company and laid the foundation for the upcoming year. Since taking control of UMAX during the first quarter of this year I have been focused on taking the necessary actions to get UMAX current with OTC Markets and also taking the necessary actions to make changes in the capital structure necessary to make UMAX attractive to both market investors and potential acquisition targets. These corporate actions culminated with our first acquisition in the fourth quarter of this year with the acquired of Home Foam Corporation in November of 2020.
The changes to its capital structure included reducing the authorized common stock from 1,850,000,000 shares to 500,000 shares amended in the articles of Incorporation and the cancellation of 500,000,000 shares owned by the controlling shareholder. This reduced the issued shares by 89% and should be concluded by the end of January. Once these shares of Common Stock are cancelled, UMAX will trade at a more normalized market capitalization (with only 60,472,27 shares of Common Stock outstanding). Both of these corporate actions are pivotal to our acquisition plans for calendar year 2021."
As previously announced and stated above, UMAX acquired 100% of the equity of Home Foam Corporation ("Home Foam"), a commercial operation which specializes in architectural foam ( EPS ) design products. These products include columns, caps, bases, medallions, railings, balconies, balustrades, shutters, window trims and sills, crown moldings and interior & exterior moldings. Home Foam also provides ornamental foam pop-outs such as window treatments for outside of new homes for several of the largest stucco subcontractors and plaster companies in Las Vegas, Nevada. Additionally, Home Foam cuts foam for packaging inserts for shipping companies as well as geo-foam for highway and road development. The company also manufactures shutters for some of the largest regional home building companies for newly constructed residential homes. Home Foam has a basic web site at which is currently being upgraded to be a full company and consumer facing, ecommerce-based web site.
Home Foam works expanded polystyrene ( EPS ) or extruded polystyrene (XPS), which is valued for its insulating and cushioning properties. Foam polystyrene can be more than 95 percent air and is widely used to make home and appliance insulation, lightweight protective packaging, surfboards, foodservice and food packaging, automobile parts, roadway, and road bank stabilization systems and more. Currently Home Foam fabricates shapes from polystyrene per specifications of its clients which includes event designs and packaging, as well as foam walls, columns, and crown molding for home builders. Utilizing heat cutting technology we can cut almost any shape and form.
Mr. Fletcher (President and CEO of UMAX ) further stated…"The acquisition of Home Foam Corporation was an initial step for UMAX to acquire additional vertical and horizontal basis cash flow positive operations in the home building industry. With the current client base of Home Foam, it is anticipated that we will generate approximately $2.0M to $6m USD in revenue in calendar year 2021. What the most exciting reason we acquired this particular subsidiary is Home Foam is in the final process of completing the closing of several new clients during the first quarter of 2021 that would potentially increase revenue by a multiple of 5 to 7 times our projected current revenue. We anticipate making an announcement with regards to these new clients by the 2nd Quarter of 2021."
Home Foam currently operates a 12,500 square foot warehouse located in Las Vegas, Nevada. The current warehouse provides services for over 50 customers and currently has 13 full-time employees. During the first quarter of 2021, it will be moving to a new location which has 23,500 square feet of operational space due to the increased client base and increased work orders we are expecting in calendar year 2021. This location is brand new and currently being built out to Home Foam's specifications.
Homebuilding Industry Preparing For A Strong Post-Virus Upswing: Opportunities And New Strategies
The U.S. housing market is witnessing an impressive comeback on major data points post COVID-19-led shutdowns, with home sales rising at a record pace, defying low inventory levels and broad-based economic and public health risks. The fundamentals of this rate-sensitive market, which accounts for almost 3% of the economy, remain favorable given the Fed’s dovish monetary stance and lower mortgage rates. Additionally, the need to rebuild inventories is expected to drive the U.S. housing aggressively.
Apart from low borrowing costs, the changing geography of housing demand has been supporting builder confidence. Demand for new homes is improving in lower density markets, including small metro areas, rural markets and large metro exurbs, as people seek larger homes to work from home during the pandemic. Furthermore, homebuilders have also been controlling construction costs by designing homes efficiently and obtaining construction materials and labor at competitive prices. Homebuilders are following a dynamic pricing model, which enables it to set price according to the latest market conditions. Meanwhile, industry biggies have been acquiring other homebuilding companies in desirable markets, resulting in improved volumes, revenues and profitability. Again, the companies are focused on growing demand for entry-level homes, addressing the need for lower-priced homes, given the affordability concerns prevailing in the U.S. housing market.
However, the COVID-19 outbreak and response to the health crisis in various countries are likely to have a lingering impact on the supply chain in the near term, which may impact builders’ ability to deliver in time. Precisely, rising material costs are quite a challenge. According to an Associated Builders and Contractors' analysis of information provided by the U.S. Bureau of Labor Statistics, there may be anecdotal shortages of some inputs as the global supply chain buckles under the coronavirus outbreak. Materials prices are likely to rise on supply chain issues and elevated trade tensions. These rapid increases in prices might have major implications on the industry. Again, shortage of skilled labor continues to be a pressing concern. Homebuilders remain cautiously optimistic about the industry’s prospects owing to rising land and labor costs. Meanwhile, softness in home purchases in the high-end housing market segment, in response to affordability challenges and general market uncertainty, is a cause of concern.
Unlike in the 2006-2009 downturn, which was driven by an overbuilt housing market, we went into the current recession with a shortage of new homes. New home construction was running 25% below demand prior to this crisis, which means that there is little if any danger of creating an excess housing supply or sharply declining new home prices this time around.
New home sales are surging. That's according to a survey conducted by John Burns Real Estate Consulting that revealed sales of newly built homes jumped 55% year over year in June. It represents the largest annual gain since the housing crash at the height of the Great Recession more than a decade ago.
One of the best ways to capitalize on this new housing boom is to invest in homebuilding stocks like UMAX .