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Starting to Know It's Public

This will be my third edition on little known Midas Medici (MMED). I called this the "weirdest" trader I've ever seen. I've also called this the company that doesn't know it's a public company. That will be changing over the coming months.

I don't know if you got the trading skills to do it, but if you do, there's a lot of money to be made on this idea, both fundamentally, and technically.

Why is this the weirdest stock of all time? Because in the 23 years I've been involved in the small and microcap world, I've never seen a company with revenues this high, a market cap this low, and a stock this thinly traded. Other companies that have come close in the past to have these characteristics generally went on to become huge wins. However, MMED is the most extreme case I've ever seen.

Here's the beauty of a thinly traded stock- it can move up and down rather dramatically on very light volume. So, for you expert traders, there's a lot of money to be made on this idea. On June 12th I suggested buying with a limit order in the $2.50 to $3 range.

In August the stock traded up to $4 for a couple of days, so investors with the skills to trade a thinly trade stock could have already notched a 60% trade on this one in the first two months.

That's just the start. Wait until you hear what these guys are up to.
 

Brazil- the Next China in US Small Caps

OK- let's take a very quick look at the company. It's a global IT Infrastructure Services and Solutions Company. They have operations in the US, Czech Republic, and Brazil. The company delivered $15.1 million in revenues in Q2- up 31.1% over Q1, and lost a miniscule $763,000.

That was before the company closed its recent acquisition of 60% of CIMCORP, a Brazilian IT services company that boasts 50% of Brazil's largest 300 companies as clients.

MMED paid $10,862 million for the acquisition in the form of $5.112 million in cash, and 1.2977 million shares with an implied valuation of $4.43 per share.

OK- are you ready for this? CIMCORP delivered $84 million in revenues in Brazil in 2010. In the Q3 earnings report, we will see the first partial quarterly results of the CIMCORP acquisition.

There are still less than 10 million shares Issued and Outstanding on MMED. The company is likely now generating over $100 million in annual revenues.

But, here's the real reason I'm so excited about covering this one, and believe it's inevitable the stock will eventually eclipse the $10 mark.

It's the Brazil connection and acquisition. Here's the idea- small cap investors found China 10 years ago, and 600 China small cap stocks made their way to the US public markets through various means. Fortunes were made by early investors in those companies.

Brazil is the 5th largest country in the world- just slightly smaller than the US. It's the 6th largest economy. Despite the rapid development and extraordinary growth, there are only 100 public companies in Brazil trading on one exchange, and the largest company attracts 50% of the volume on the whole exchange.

Like China 10 years ago, smaller Brazilian companies in this $100 million range have no access to capital. There's 1000 companies trying to go public, and only a few get out every year. The Investment Banking industry is nearly non existent in Brazil.

There very few Brazilian small cap companies trading with US listings, and I believe that will be the next big frontier for growth investors. It will replace China in that regard.

The first Brazilian based small caps to make it to US listings will have a valuation honeymoon- once discovered, I suspect they will trade very well.

MMED is the first microcap stock I've found to have true Brazilian operations. This stock will be a home run somewhere down the road.

Here's the chart. As you can see, there's not a lot of interest in this stock- yet. That's because no one knows about it- yet.

I suspect over the coming day, week, and months, investor will discover this one- with under 10 million shares I&O, and over $100 million in annual revenues.

The Brazil connection is going to be very big for this stock. Investors will soon start seeking small cap stocks with Brazil stories, and the will be after this one.

It's also still very thinly traded, so you have to be careful about both buying and selling this stock. Even a 20,000 to 30,000 share day might drive this one up the charts $2 to $3, and give you a short term double or triple on your money. But- you'll have to be a smart traded. You'll have to file a GTC limit order to sell, and then wait for your shares to be taken out.

The way to accumulate is from the bid side- meaning use a limit order to trade into MMED at a reasonable level.

Anywhere from $2.50 to $3 gives you tremendous upside when the stock finds its way to $10.

Make you limit order GTC- meaning Good Till Cancelled. That way, if some random shareholder decides to sell a few shares, they might find their way into your account on another day. In the meantime, this stock will continue to be hard to buy. If you tried to get any size, you would fail. About 5,000 shares is the best you can hope for under $3. When the Brazil component of their business gets discovered by Wall Street- look out above.

Lots more to come on this company. This one is an extraordinary find and a great opportunity to beat the rest of the world.

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