New post here at the The Perfect Stock blog. My last pick of Goldcorp Holdings (GHDC.OB) hasn't performed at the level that I had expected, but I still like the selection. Panic is beginning to overwhelm the market again. Generally when that happens, there is no better place to park some of your money than gold.
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.