It's been a while since I've had a post here on The Perfect Stock blog. I've been having a difficult time finding stocks truly worthy of perfect status. The last stock that fit the mold was LQMT.PK, which I talked about quite a bit in the comments section of my previous post. However, I never got a chance to do a full post on it. With perfect stocks being so rare, I've also posted in the past about stocks that I felt had just one perfect aspect (ie. a perfect chart). Well, this particular post will fit that mold and will focus on a stock that I believe just has "perfect news". South Shore Resources Inc. (SSHO.PK) is that 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.