To OTC Journal Members:

Please accept our apologies if you received a corrupted version of our newsletter over the weekend.  We had a technology problem that we still have not been able to identify, but it seems to have gone away.  In the future if this happens simply use the link at the beginning of the newsletter and read the web page version which opens automatically with a simple click.  The link worked fine in this weekend's edition.

Tonight's main event is centered around the Envoy Communications (TSE: ECG) conference call today where they reviewed the 2nd Quarter financial results and revealed that they have finally received the approval to begin trading on the NASDAQ.  The timing could not be better in conjunction with today's big move up in the NASDAQ led by the Technology sector.

This Friday we will be issuing a new profile.  This is a very exciting technology company that is already enjoying a substantial revenue stream.  This particular stock lost 40% of its value along with every other stock in April and early May.  However, this stock has not followed the rest of the market down since the first week of May.  Since it hasn't gone down in the last month, it's probably not going lower.  Therefore, if the stock holds steady this week, the entry level is ideal.  Their product is one that we believe will be used commonly by nearly every company within two years.
 

Market Comment

Today's huge rally was welcome relief for investors that have been getting their brains beat out for the last sixty days.  The NASDAQ was up 254 points (up 8%) and the DOW rose 228 points.  More importantly, there was a huge rally in the technology stocks that have been taking the market down.  In the immortal words of Austin Powers' arch rival Dr. Evil, the rally was Breathtaking.

We're not quite ready to declare the Bear Market over, so don't break out the Champagne yet.  This rally is probably a head fake, but we were overdue for a decent week.  Stocks don't go up forever, and they don't go down forever.

Today's rally confirms what we have been saying all along.  There is a huge pent up demand to buy stocks, and lots of cash sitting on the sidelines.  The big money is just waiting to believe the economy is cooling off and that the FED is done raising interest rates.

The small stocks that we follow did not participate in today's rally.  We will need some sustained positive action in the markets before that happens.  Once we get a steady confirmed rally, the small stocks will follow.  This presents opportunities today for tomorrow's profits.

For the next several weeks the market will focus on economic numbers.  We are past earnings season, so analysts will key on Unemployment claims, CPI, PPI, and all the other numbers they will analyze to death to determine if the economy is cooling off.  If the numbers come in somewhat benign look for a great summer rally.  Worst case- the bull is back by the 4th quarter.  Best case- June's numbers show a cooling off of the economy, the Fed raises 1/4 point more, and stocks begin a sustained summer rally.
 

Envoy Communications (TSE: ECG)

Major news was revealed at Envoy's conference call today, and we strongly recommend that you listen to the replay of the call.  We believe that this stock will participate in a major way in the next bull market, and today's call just strengthens our belief.

First and foremost, Envoy finally received its 20-F approval from the SEC to trade on the NASDAQ.  We are informed that the stock will trade on the NASDAQ under the symbol ECGI, and will begin to trade sometime within the next week.  As soon as it opens for trading we will let you know.

Secondly, we learned that Envoy has raised another $10 million in a private placement which was priced at $7, thereby significantly strengthening the balance sheet and allowing the company to complete several pending acquisitions.

Third, we learned that the company will be rapidly moving forward with a number of acquisitions and strategic alliances that have been on the back burner pending the NASDAQ listing approval.

Fourth, the second quarter numbers were very strong once again with revenues up 54% and EBITA (earnings before depreciation, goodwill amortization, interest expense and income taxes) also up 54%, the growth was impressive.  The stock is currently trading at a PE ratio of 15 based on trailing earnings EBITA.

This stock is cheap.  This company is growing rapidly. This stock is very undervalued.  Listen to today's conference call and make up your own mind.  Based on the way this stock has behaved over the last month, there seems to be little downside risk from these levels and maximum upside potential.

THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK. THE INFORMATION FOUND IN THIS PROFILE IS PROTECTED BY THE COPYRIGHT LAWS OF THE UNITED STATES AND MAY NOT BE COPIED, OR REPRODUCED IN ANY WAY WITHOUT THE EXPRESSED, WRITTEN CONSENT OF THE EDITORS OF OTCjournal.com.

We encourage our readers to invest carefully and read the investor information available at the web sites of  the Securities and Exchange Commission ("SEC") at http://www.sec.gov and/or the National Association of Securities Dealers ("NASD") at http://www.nasd.com.   We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at  http://www.sec.gov/consumer/cyberfr.htm.   Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.