See see the charts for MMOG, REVO, and MONT respectively below:
I'm not going to go into any detail regarding the company make up of these three tickers symbols since this post is all about the charts. However, I will say that of the three, MONT is the most appealing to me. It's moving as a "incher" (meaning consistent 1-3% daily gains) and doing so on steadily increasing volume. That's a very bullish trading pattern. Often times the daily moves "speed up" and get progressively larger. Stocks like these in many instances double or triple from the price at the start of the move. Because MONT first started to move at around $0.85/share, it still potentially has a lot more upside.
MMOG, REVO, and particularly MONT are worth following, further investigating, and maybe even buying. No one knows what the future holds and there are no guarantees, but there's no doubt that right now those three stocks have perfect charts.
Golden Minerals is a Delaware corporation based in Golden, Colorado, primarily engaged in the advancement of its pipeline of exploration projects in Mexico and South America. The Company has a portfolio of approximately 30 exploration projects, including the El Quevar project in the Salta Province of northwestern Argentina and advanced stage drilling projects in Mexico and Peru. Back in August of 2010, the company announced an increase in silver reserves at the El Quevar project to 60 million ounces. Silver currently is being priced at more than $23/oz.
Silver is surging
Silver is in a serious bull market. See chart below:
Although silver has been priced lower in recently days, most believe the price will eventually move higher. The Chinese in particular are ultra concerned with inflation and are also hoarding precious metals and rare earth elements to help fuel their domestic growth. As a result, China is expected to reduce there silver exports by 40%. By a major player like China reducing the rest of the world's supply, the price of silver should inherently rise.
After a recent private placement, Golden Minerals still only has about 15 million shares outstanding. Over 87% of the shares are owned by institutional holders or insiders. That is the one of the highest among publicly owned precious metal companies. That means only about 2 million shares are left to the retailers for trading purposes. In other words, it won't require much to move the stock higher.
See below for AUMN chart:
As you can see, the stock first began its rise in September and has move up about 300% in the last two months. AUMN finally took a short breather during the 2nd week of October when the company announced a secondary offering. During the offering the Bollinger Bands tightened, which generally is a technical precursor for a significant move, at around $22/share. On Friday, Golden Minerals announced that the offering was over and the shares explode to $25 on solid volume signaling another technical breakout.
Huge price target increase
After the initial explosion of AUMN from $8 to $15 due to the surge in silver prices, the stock hit overdrive when a price target of $104 was given by the brokerage firm Dahlman Rose. With silver priced the way it is, the firm believes that AUMN deserves a billion dollar plus market cap to make it comparable to its peers. After the secondary offering, the target was later revised to $85. Even with AUMN currently at $25, the price target allows for plenty of upside. See link for the report. http://www.scribd.com/doc/38536240/DRCO-AUMN-CoNote-2010-10-01
Insiders are still buying
Some people would be hesitant to buy a stock that's already moved 200-300% so quickly. Well, the insiders of AUMN aren't one of them. During the company's secondary offering priced at $18.50 practically every significant insider in the company participated. The CEO, CFO, VP, Chief Geologist and Directors all took advantage of the opportunity to add to their share count. Also, AUMN's largest institutional holder added during the placement as well. If all of those guys feel confident about adding at these levels, I see no reason why a retail investor wouldn't be comfortable doing the same.
This stock maybe has more indicators for upward movement than I've ever seen. You've got a low float company with assets of the surging commodity silver, great technicals, a big price target, and insider buying. I haven't even mentioned the fact that low float big board stocks have been red hot of late (LIVE, RITT, etc.). Golden Minerals could be another one that gets pushed up by traders as well. The only thing that I see that could derail the upward movement of AUMN is if the price of silver does a temporary nosedive. I believe $40-$45 will come quickly. Golden Minerals Company (AUMN) is the perfect stock.
South Shore Resources Inc. is a company engaged in the development of products which are committed to the reduction of harmful greenhouse gases and fuel savings with the use of Hydrogen Generating Modules and related accessories to the transportation and automotive industries.
On Friday 8/13/10 after hours, SSHO.PK released major news where they announced that they had received a letter of intent (LOI) pursuant to which a private Ontario company wishes to purchase for $44 million, an exclusive 20 year license for use of SSHO's intellectual (Hydrogen on Demand) property.
The reason that I believe this news is perfect is because the company only has 44.6 million shares outstanding. The current share price of $0.12/share puts the market cap at a little over $5 million. This deal would be for almost 9 times the current current market cap, which could theoretically translate to over a $1.00/share.
Basically, you've got a low float stock that just released news that potentially values the company significantly higher than it currently sits. Bashers will say that it's only a letter of intent, we don't know a lot about the purchaser, and that is sounds too good to be true. I say that that's a perfect combination for speculation, which we all know is great for a stock. Another positive for SSHO.PK is that there doesn't appear to be any significant front loading on the stock, which generally means limited share dumping by paid marketers. Also, dilution shouldn't be much of an issue since shares have basically been maxed out with only 50 million shares authorized per there last quarterly report (see http://www.otcmarkets.com/otciq/ajax/showFinancialReportById.pdf?id=34955 for details). Nothing is a guarantee in the stock market, but with the aftermarket and pre-market trading limitations for pink sheets stocks, along with all the things I've mentioned above, it should run on Monday even with a significant gap up. Who knows where the price eventually ends up, but in my opinion South Shore Resources, Inc. (SSHO.PK) has perfect news.
For the sake of this post, I'll go back to a philosophy I've used in the past in picking a "perfect stock". I've stated that certain times in playing the stock market, a story is so powerful that news alone can be enough to make a stock perfect. The past month and a half, the national headlines have been dominated, by the BP's oil spill in the gulf of Mexico. The company that I've selected reported news Friday afternoon that potentially positions it to be a big winner in the market on Monday. MOP Environmental Solutions Inc. (MOPN.PK) is the next perfect stock.
MOP Environmental Solutions manufactures and distributes MOP(R) Maximum Oil Pickup. MOP picks up and recovers oil spilled on land and/or water. The company's revolutionary, 100% Recyclable, new absorbent material picks up to 30 times its own weight in oil, without absorbing water, restores traction on slippery surfaces, and safely restores a clean, natural environment. After reaching out to BP on numerous occasions, the company announced that it had finally received a Purchase Order from BP to send its oil spill absorbent booms to the Gulf of Mexico for the ongoing oil spill clean up efforts. Per the purchase order, MOP Environmental will provide BP with three tractor trailerloads of booms to be shipped to the Hope Dale Site staging area in Saint Bernard, Louisiana. The company also mentions that upon fulfillment of this order, additional deliveries are anticipated to continue on a weekly basis and that BP will be looking to accept as much their product as they can provide.
Big Company + Little Company = Big Gains for Little Company
Often times in my posts, I'll reference my other blog http://yourtradingtips.blogspot.com. One of things I mentioned on that site is that when "trading the news", it's generally a good idea to buy stock in a small company that partners or provides services to a large established company. Just last week, you saw Jones Soda Company (JSDA) double on news that their distribution network with Walmart was expanded. This new relationship between MOP and BP certainly meets this criteria and I expect stratospheric gains in MOPN.PK as a result.
The Oil Spill Trade in Pinks and OTCBB's Has Already Been Working
This oil spill has been going on for well over a month now. Many oil services and environmental solution stocks on Pinksheets and OTCBB have already skyrocketed in speculation of providing a potential solution. MOPN.PK is no exception as it has already moved from a low of $0.001 to a high $0.20 a share (currently it's at $0.079/share). However, these stocks have been giving up much of those gains as the SEC has begun cracking down on oil spill solution companies issuing "creative" press releases just to superficially move their share prices higher. For example, the SEC suspended the trading of Act Clean Technology (ACLH.PK) while they investigate the "accuracy"of some of their claims. I'll certainly admit to have taken advantage of the oil spill trade enthusiasm, but I stopped playing them because I too had noticed how "fluffy" and ridiculous many the PR's had become. What makes MOPN.PK so intriguing though is that it is the first non big board stock to have actually received a contract from BP. In my opinion that is a game changer.
By now most of you know that low float stocks are key in achieving those quick gains. MOPN. PK definitely fits the bill. According to most recent reports, there are about 216.5 million shares outstanding. However, the float is only about 30-40 million shares. It doesn't take long for a stock currently at 8 cents to chew through so relatively few shares. Based on the interest this stock has garnered this weekend, a sizable move higher does seem probable.
MOP Environmental Solutions' new contract with BP, a favorable "oil spill trade" track record, and a low float is a recipe for a potentially explosive day on Monday. The only things that I think could hinder a big run in MOPN.PK is if the share price opens too high or if management decides to sell or dilute shares early in Monday's trading. I don't think a high opening is that big of a deal (15 cents or less should be okay) because a lot of people will be chasing this one and current holders should want to take advantage of the renewed interest in the company. I also think that kills the "sell the news" theory and slows down any immediate dilution. Why sell at 10-15 cents when you could just as easily wait and sell at 30-40 cents? The public's demand for shares should exist for this type move especially with such a low float and a steady stream of news surrounding the ecological devastation. The market can be unpredictable, but I believe things are set up well for MOP Environmental Solutions, Inc. (MOPN.PK) to be the next perfect stock.
- Technicals are at breakout levels
- Gold is on fire
- Company is tightly connected to SFMI which has had a stratospheric rise
Hopefully, I'll have more time later to do a more in depth post, but this one is easy money in my opinion.
I just wanted to mention a few more points as to why I like GHDC.OB:
- Although GHDC.OB has 184 million shares, the float is less than 49 million shares
- SFMI leases property owned by GHDC. GHDC gets $1 million a year for the lease plus 15% of SFMI's revenue (not profit) from the property
- SFMI and GHDC have a similar share structure yet SFMI is at 40 cents and GHDC is at 7 cents
I look for a lot of people who have made a killing in SFMI to start taking profits and move some of that money into GHDC while it's still cheap.
Blugrass Energy, Inc. is engaged in the business of oil and gas exploration and development. The Company is focused on exploration and production of oil and gas properties in North America and has interests in producing oil and gas assets, and has longer term exploration assets in the United States.
News in a Hot Sector
After hours on Friday 4/9/10, Blugrass Energy announced that they had entered into a Memorandum of Understanding with DeepExpro, LLC, a privately held independent oil and gas exploration and production company based in Houston, Texas, to jointly identify, evaluate, acquire, explore, and develop various working interests and net revenue interests in oil and gas prospects.
The oil and gas sectors have been red hot the past few weeks. Stocks such as SSN, PDO, and PDGO, just to name a few, have exploded higher as oil has solidly moved past $80/barrel. In all honesty, it's difficult to gauge how significant this press release is regarding the overall prospects of Blugrass Energy. However, traders and investors are always looking for reasons to move up stocks in hot sectors. Fridays news should get noticed by those looking speculate.
See below for a chart of BLUG.OB:
Currently, BLUG.OB is sitting at $0.195/share. As you can see from the chart, it is very close to its 52 week low. Over the last year the stock has traded as high as $1.20/share and has spent the majority of its time over $0.40/share. As a result, the downside appears to be limited at these levels. In charts like this one, a little news can often times trigger a reversal. After reviewing quite a few oil and gas stocks, very few are still hovering near their 52 week lows. Most have surged quite substantially off of those levels. I view a potential investment in BLUG.OB as low risk opportunity to catch a stock at its bottom before a probable rise.
According to Blugrass Energy's last 10-Q, there were 50.05M shares of Common Stock outstanding as of 2/22/10. There are 24.05M shares currently owned by 5 individuals and institutions, which means that the float is 26M shares at the most. With a float this low and the share price currently less than 20 cents, BLUG.OB could rocket quickly with a surge in volume.
The Pump is On
I've never been much of a fan of those high profile penny stock pumping websites. However, I'm not too naive to understand that under the right circumstances, they can be effective tools for finding those quick moving stocks. After doing a few checks this weekend, I've discovered that quite a few penny stock sites have spotlighted BLUG.OB as a potential fast riser this week. Despite any negative feelings you may have about these sites, they do have huge followings. When you have a stock being pumped while it hovers near its bottom with the weekend used to create the buzz, chances are high that there will be sudden, strong buying interest.
The last oil and gas stock I spotlighted on this site was Callon Petroleum (CPE) back in May 2009. I was too early with that choice and the stock continued to lag the remainder of that year. However, CPE has been a 4 bagger in 2010 and has really exploded the last month. This is just one more example of the roll this sector has been on as of late. It only makes since for investors and traders to try and look for the next best thing. Blugrass Energy isn't necessarily one of those fundamentally strong stocks that you should fall in love with. However,I believe that the combination of news, a low float and the potential for a technical reversal and sudden buyer interest is a great recipe for quick stock gains. BLUG.OB could double quite easily and could potentially move much more. Bluegrass Energy (BLUG.OB) is the next perfect stock.
Tres Estellas Enterprises, Inc. is shell company that entered into a merger agreement with IN Media Corp back in November 2009. IN Media is a developer of Internet Protocol Television (IPTV) appliances and interfaces with implementations of the technology in key provinces of China and planned rollouts in India and the United States. IN Media Corp is the surviving name of the merged companies.
See below for a 3-month chart of TLLA.OB as of 2/22/10:
This is one of the craziest uptrends that I've seen in some time. There has only been one red trading day since 12/11/09. One red day in over a 2 month time frame is almost unheard of. The volume has been very light, but it is starting to pick up and the chart is starting to turn more parabolic. In digging a little deeper, I've also found that TLLA.OB has really only had 2 MMs on the bid/ask: DOMS and ABLE. These two have a reputation as being two of the more friendly MMs out there. That is a huge positive.
Stocks like TLLA.OB are often low risk / high reward stocks for those that get in before the herd and don't get too greedy. Based on stocks with trends like this in past, you could see either a quick double on heavy volume or a slow grind higher on consistently light volume. If you decide to buy, be careful using stop losses. Stocks like this can violently dip all of a sudden and recover in a matter of hours (look at what happened to NGLF.OB on 2/5/10 as proof http://www.google.com/finance/historical?q=OTC:NGLF). It can be tough to buy a stock on technicals alone, but IN Media's recent trading history is awful hard to ignore. TLLA.OB is the next Perfect Chart.
Forterus Inc. is engaged in diverse business activities, including drug and alcohol rehabilitation, and finance. The company maintains an intensive outpatient program in conjunction with sober living facilities. Hythiam, Inc. (HYTM) is a notable publicly traded company that would be considered comparable to Forterus.
On 1/22/10 after the market closed, FTER announced their 2009 fiscal year results. See below for the highlights:
- $383,937 in Net Income for Fiscal 2009 compared to a loss of $1,671,525 in Fiscal 2008.
- $5,842,182 in Revenue For Fiscal 2009 compared to revenue of $4,089,139 in Fiscal 2008.
- 435% increase in Net Income from Fiscal 2008 to Fiscal 2009.
- 43% increase in Revenue from Fiscal 2008 to Fiscal 2009.
- 0.43 Revenue Per Share (on share count of 13,513,264).
- $0.03 Earnings Per Share (on share count of 13,513,264).
As shown above the company reported a consolidated net profit of 383,937 or $.03 per share. With FTER.PK closing at $0.065/share on 1/22/10, the trailing PE is a ridiculously low 2. The CEO is quoted as saying, "We will continue to make strategic investments in qualified and experienced staff, the major asset of any quality organization, to complement the investments to grow our bed count as we continue on a sustainable, scalable and profitable growth path in fiscal 2010." He also mentioned that the company was able to weather the economic storm of last year because they had insurance contracts that provided steady revenue. I believe with these results most investors and traders will conclude that this stock deserves to trade at a much higher multiple. Right now, the current market cap for FTER.PK is less than $1 million. Hythiam, Inc. currently has a market cap of approximately $30 million. It is an understatement to say that Forterus is undervalued.
On 12/31/09 FTER.PK had a share count of 13,513,264. The float is only about 5 million shares. With a stock this inexpensive and a float this low, there is a very high probability that this stock will move much higher and at a very rapid pace.
See below for a chart of FTER.PK:
As you can see the stock has been quietly trading in the 5 cents range the past 4 months. The past couple of days, Forterus has traded higher on increased volume. This action is often a precursor to a significantly higher move. FTER.PK has a 52 week high of about 10 cents. With a surge in volume, which I'd expect after these results, this high should be tested. If it happens to break through that resistance, the stock could potentially run much higher. The 18 month high is $0.52 cents.
Rehabilitation facilities and services will always have a need in today's society. Forterus is one of the few publicly traded companies with expertise in this area and they have benefited from stable contracts in spite of tumultuous economic conditions. The company ended 2009 with stellar financial results, which based on the current share price was clearly a surprise to Wall Street. The stock has a low float and the chart appears to be setting up for a move higher. At a current PE of 2 I believe FTER.PK has the goods to at the very least double. This could happen as early as Monday, but to be frank, I wouldn't be at all surprised if it went well above that. Forterus, Inc. (FTER.PK) is the next perfect stock.
China New Media Corp is a fast growing advertising provider in China. Since their business began in 2000, they have become one of the largest outdoor advertising companies in China with a dominant position in Dalian, the commercial center of Northeastern China. Currently, they are expanding their outdoor media platform into two of the most populous cities in northern China, Tianjin and Shenyang. Each city has approximately 10 million people. CMDI.OB provides comprehensive advertising services such as art design, ad publishing, daily maintenance and technical upgrading. They also have a proprietary, web based advertising platform call City Navigator, which they feel will revolutionize the urban viewing experience. Some of their largest advertising clients in terms of revenue include leading international brand names such as Coca-Cola, Pepsi, UPS, HSBC, Sony, Canon, HP and leading domestic brands such as China Mobile, Ping An Insurance, China Unicom, CITIC Bank, and China Merchant Bank..
CMDI.OB began trading on 12/28/09 at an opening price of around $2.00/share. The stock was the product of a reverse merger between Dalian Vastitude Media Group Co., Ltd. and Golden Key International (formally GKYI.OB).
China has the second largest outdoor advertising market and is one of the fastest growing in the world. Also, China's overall ad spending has kept a double digit annual growth the last 10 years. The company's expansion into other populous regions and China's consistent high levels of economic growth, should power China New Media's immediate and future growth.
Some of CMDI.OB financial highlights for their fiscal year ending 6/30/09 include the following:
-- Total revenue increased 58% year-over-year to $8.42 million
-- Net income increased 268% year-over-year to $2.84 million
-- Gross profit was $4.9 million, or 59% of sales
The statement that really caught my attention by CEO James Wang was, "We expect to maintain a minimum 35% annual growth rate in the next five years."
One general result of a public company that has come about through a reverse merger is heavy insider ownership. CMDI.OB is no exception. China New Media Corp has approximately 27 million shares outstanding fully diluted. However, approximately 22 million shares are held by the following:
Directors and Executive Officers - 9.65 million shares
Chuk Chung Fuk - 7.15 million shares
China Reinv Partner, L.P. - 5.5 million shares
This only leaves around 5 million trading shares to the public. Such a small float can be key in a stock achieving quick, significant gains.Undervalued
Based on the earnings from the fiscal year ending 6/30/09 and the 2009 year ending share price of $2.35, CMDI.OB was trading at a PE of a little more than 20. However, this trailing PE number doesn't take into account the company's earnings the entire 2nd half of 2009. If you consider the company's growth prospects, the current trailing PE assuming better results the latter part of 2009 is probably closer to 15. Because the stock market places far more emphasis on earnings going forward, a better measurement for determining this stock's value is its Price/ Earnings to Growth ratio (PEG). At a 35% annual growth rate, which the CEO expects at a minimum, CMDI.OB's PEG would be around 0.4. Generally, stocks with a PEG < 1 are considered undervalued. Stocks with a PEG < 0.5 are considered to be extremely undervalued.
As I've mentioned before, CMDI.OB just started trading on 12/28/09 . So, there's not much data available from a technical standpoint. See a candlestick chart below of the stock's progress thus far:
As you can see, the stock has traded up the last three days on modest volume. Admittedly, this chart doesn't convey a strong technical argument for CMDI.OB, particularly with so many traders away for the holidays. However, when a stock is brand new like this one, limited data can carry some weight to potential shareholders. I've seen a number of stocks turn public via a reverse merger that trade lower out the gate as holders dump shares looking to cash out as quickly as possible. Although, it is still early, this does not appear to be the motive of China New Media's shareholders based on the trading thus far. Many of the shares are owned by upper level management and per SEC filings company executives have stock purchasing incentives based on achieving certain yearly fiscal targets. Many investors will look at the chart along with the overall make up of the company and conclude that CMDI.OB is justifiably trending up.
China New Media Corp is a fast growing outdoor media company just popping up on the radars of most investors. The biggest concern most typically have with Chinese companies is credibility. I believe the strong international and domestic client list China New Media maintains goes a long way in legitimizing the company and its future prospects. CMDI.OB has great fundamentals, a low float, is extremely undervalued, and appears to have some upward momentum. Also, there should be no opportunities for shorting because the stock is so new. I believe all these factors will result in this stock heading higher at a rapid pace. I'm not going to say that the CMDI.OB will go straight up without there being some dips along the way. However, I do believe the company will reach at least $4.00/share very quickly as long as insiders don't do an about-face and all of a sudden go on a selling spree. Sure, there's a risk in purchasing an OTCBB stock that most people know nothing about, but I think the potential reward of finding a hidden gem is too good to pass up. If you want to read the filing regarding this reverse merger and company's origin, read the 8-K at the following link: http://www.sec.gov/Archives/edgar/data/1080627/000107997309001163/dvmg_8k-112009.htm. China New Media Corp (CMDI.OB) is the next perfect stock.