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This past week there were new BLOGS
on Commerce (into orbit) Planet (OTC BB: CPNE) and eFoodSafety
(OTC BB: EFSF). If you read the OTC Journal BLOG on CPNE,
you know I recommended holding all or most of your shares through the short
term $2 price target. Wow, talk about breakout.
The BLOG is your opportunity
to ask questions and offer comments. I will make an effort to answer every
legitimate question. If I don't know the answer, I will contact the management
and get the answer. Alternatively, if you have questions you don't want
publicly displayed, you can always email me directly at editor@otcjournal.com.
To use the BLOG, simply go
to the home page at www.otcjournal.com
- the BLOG scrolls down from the upper right hand corner. The most
current journal entries appear on the right hand side of you screen. Check
back frequently for updates particularly when stocks are moving to overbought
or oversold levels in volatile markets.
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Hot
is Not Always Right |
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I have a cautionary thought to share
with all readers. If you have been paying attention, you have to admit
I have been uncovering some very profitable ideas for members over the
last six months.
CPNE, PNWIF, NIHK, EFSF, and
TTGL
have all made the Sports Center highlight real. These have all been big
winners for any OTC Journal member who acted early.
Looking back on the last year, there
are three events which should have earned your loyalty. Of course, I am
going to mention Commerce Planet (CPNE) - I stuck with that idea
for three years, and now it is paying off in a huge way for those who hung
in there with me. However, there are two other events you might not be
thinking of that provide major satisfaction.
Those two events are two editions
published in 2006: The May
26, 2006 edition entitled "Don't Say You Weren't Warned", and
the follow on edition of October
4, 2006 entitled Don't Say You Weren't Warned, Part Deux (II).
If you want verification, just go
back and read them. Click on the links. In the May edition I suggested
if you weren't prepared to be a long term investor through a brutal low
volume, weak summer, sell all your stocks and get out. And, that was exactly
how the summer turned out. In the October edition I completely flipped
to the other side and suggested the microcap climate was ripe for a big
move, and it was time to really load up the boat. And, voila- dead on again.
20 years of experience makes me a good judge of the climate.
Here's my warning. If you have been
paying attention and acting, you have been making a lot of money. I have
several new and exciting ideas coming up, and I expect a couple of current
followings to start behaving much better.
My message- don't just blindly buy
everything I suggest because I suggested it. These are still microcap stocks,
and there is still a great deal of risk in many of them. If you like an
idea, make sure you understand the company's business model, current market
value, and upside potential. Get your own independent feeling and only
act if you like it, not just because I say so. It is your money, so invest
it responsibly. Most importantly, stick with the SSL (suggested
stop loss).
For what's it's worth, I believe
this microcap bull market can last through at least 2008 with all the normal
blips along the way. For those who stuck with the OTC Journal throughout
the dot-com meltdown of 2000, 911 in 2001, Enronitis and other corporate
scandals in 2002, and the 250% move in oil from 2004 to 2007, thank you
for your loyalty. Our time has come.
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Commerce
Planet (OTC BBL CPNE)- Exploding Up the Charts |
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There were lots of comments, questions,
and congratulations in last week's BLOG on CPNE. In short,
the stock has simply taken off like a rocket ship. Something has changed-
but what?
Last year when the company kept delivering
stellar numbers but the stock continued to grind under the massive weight
of early financier excess supply it simply didn't make sense. Lots of us
were scratching our heads- with annual and annual earnings run rate of
$.28,
how could this stock trade below $2.
This chart is amazing. Look how long
the stock simply ground between $1.50 and $2. It took 4 months
to make the trip from $1.50 to $2. It took 4 days to make
the trip from $2 to $3.
Here's what I believe has changed
and is fueling this meteoric rise- Once the stock traded up above the $2
level, the market cap eclipsed the $100 million mark, which made the stock
fair game for hedge fund managers who were previously excluded from trading
in this stock.
I believe fund managers have been
watching the company's progress and waiting for it to be an "allowed" buy.
Now, the supply is clearly diminished, and the demand in surfacing from
funds who have a big appetite for smaller, high growth companies.
This "filtering down" was inevitable.
As the larger cap stocks traded well, it was inevitable fund managers who
start looking for smaller, high growth companies that were undiscovered.
This stock may become very volatile
to both the down and upside. Remember, hedge fund managers have very short
fuses, and will pile out at a moment's notice on any sign of trouble.
One thing is for certain- a new audience
has surfaced for this stock, and it will now trade more efficiently than
it has in the past. We will not be able to take advantage of the inefficient
market we had when it struggled to break $1.80.
It's kind of like watching your children
graduate and go off to their first job in the real world. CPNE has now
graduated from and inefficient, individual investor market to one in which
the funds will dominate.
If the company can continue to deliver
EPS in the $.07 to $.10 range, the stock has got to be worth somewhere
in the $5 to $8 range, especially if they keep growing.
In light of the meteoric rise, I
would rate it a temporary hold if you are a trader- a strong buy if you
are a long term investor and don't care about week to week ups and downs.
All in all, very satisfying.
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