To OTC Journal Members: 
 

The Big Picture

I've been absent of late- out for several days last week and out for the Jewish Holiday yesterday. The market should be ready to a big correction after the massive run up of the past six weeks, but it doesn't seem to be obliging investors. The talking heads on CNBC have been predictably wrong on this for the last several weeks.

It's worth noting it's the market's job to confound the majority of investors most of the time, and it's not disappointing now. However, volumes are lighter as investors seem reluctant to commit new capital, but stocks are not falling apart as investors all seem unwilling to give up positions where they are holding nice profits. 

As I listen to to one after another call for a correction, I simply focus on the big picture. Here it is: Globally, we are better off today than we were one year ago, and in one year things will look even better than they do today. The total financial meltdown was averted, and the picture is improving in many areas of the world.

Here's the earnings picture for the S&P 500 (chart from Adam Olensis of TheAgileTrader.com), which is one of the components fueling the market's come back. Note the upturn both measures of forward looking earnings for the S&P (the red and blue lines). Note the S&P itself as shown by the black line has rebounded faster than the earnings forecasts. However, look how much further it fell.  It's entitled to "equalize".

We're probably setting up for a fast and furious correction, followed by a return to appreciation as we navigate the tricky waters of October. September, typically the worst month of the year, was anything but, once again confounding the experts. 

A far more interesting consequence of the renewed enthusiasm for the market is manifest in our little microcap universe. Some of the smaller, riskier companies are getting financing again. SPKL and BOCX are two that have surged of late on the revelation they are cashed up again and coming back.

I have been working very hard on several new ideas. I have two absolute barn burner valuations out of China, and one new US based idea I am focused on. They'll be coming soon. In the meantime, 

There's two big news items to go over, so let's get to it. 
 

Biocurex (OTC BB: BOCX) Looks To Team Up

There's another nice price and volume surge on recent idea BOCX this morning off an early announcement. At the International Society of Oncology and Biomarkers being held this week in Amsterdam, BOCX is presenting a study that demonstrates their RECAF cancer marker, when used in conjunction with other tests for ovarian cancer and colorectal cancers, eliminated 100% of false positives.

This could be an early indication Biocurex plans to commercialize in combination with other tests along with it'sRECAF test on a stand alone basis.

This is very favorable data, and these early stage biotech ideas tend to trade on data of this kind.

As you can see, since coming off a multi month, low volume trip to the pricing cellar, BOCX has been pretty hot of late. We've made three trips to nearly $.30, and the quadruple move from $.05 to $.20 is holding in nicely. The stock is enjoying a decent volume day today off this news, having traded 350,000 shares 3 hours into the trading day.

A little more grinding around these levels sets us up to hold $.30, which is my short term target. If the company continues delivering results for the market, the stock is likely to run to its next level.
 

Force Protection (NASDAQ: FRPT) Inks Pretty Big Deal

I noted in my September 17th edition that FRPT, a stock only offering a meager profit at this point in time, was coming back at the end of September. 

Yesterday, we learned why. The Army just ordered another $52.8 million worth of these bad boys. This is the most advanced mine resistant vehicle in the world.

I published on this stock back on July 18 at $5.20. It's currently trading at $5.67- not exactly flying up the charts like some of my other ideas of late. Net profit: 9% so far.

This recent order has the stock back in the market's reasonably good graces, but there is a lot of work to do before we make any real money on this idea.

However, this company should do in the range of $1/2 billion in annual revenues for the next five years, and I know one analyst that believes the company will earn about $.45 in EPS this year. Any reasonable valuation would put the stock at $9 or $10 if those numbers come to pass.

I still believe the market over reacted to a contract loss mid summer, and there is a huge gap that will be filled eventually. Check out the chart.

In mid July FRPT lost a rather large contract to a competitor, and you can see what happened with the stock. It absolutely got killed in one day. It closed at $9, and reopened at $6.

I believe in typical knee jerk fashion, the market has over reacted to the event, and the stock is worth far more than where it's trading today. Look for this one to really surge once we either get past the perceived correction, or the market extends far enough sideways for the buyers to be emboldened and jump back in.

Home Page : www.otcjournal.com
Email Questions or Comments To: editor@otcjournal.com