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No new comments in the BLOG so
far this week. The NASDAQ's great wall of China, the 2100 level, finally
cracked for the first time in months on Friday. The NASDAQ traded briefly
above 2150 into new all time high territory in '05. To put this in perspective,
the previous high was set on the second trading day of the year, which
illustrates how poorly stocks have traded in '05. The market is now ready
for a breather which could last through the remainder of the summer, but
should be setting up for the typical second half strong rally. Some micros
could still rebound. Two ideas below.
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Check back frequently for updates particularly when stocks are moving to
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Aegis Assessments
(OTC BB: AGSI); Long Overdue Sales Finally Materializing |
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As many of you know, I believe a
long overdue bounce is coming in the defense/homeland security sector.
One stock which looks like it could be positioned for a rebound is AGSI.
This company was a huge disappointment in 2004, but might be turning the
corner in the second half of 2005.
Their flagship product is the Radio
Bridge you see pictured here. It is a simple an elegant solution for the
problem facing first responders in a crisis situation. If you have read
reports from the aftermath of 911 and other emergencies, you know the inability
of first responders to communicate in a emergency is a big problem. Paramedics,
Police, and Firefighters all show up, but they cannot talk to each other
on their hand sets.
The Radio Bridge you see pictured
here is the solution. It doesn't require any big infrastructure build out.
The device is the size of a large briefcase. When the paramedics show up,
they simply give a handset to an operator to plug into the radio bridge
and viola- everyone is talking to each other.
AGSI had high hopes for big
sales of this product in 2005. It didn't happen- they aligned themselves
with an ineffective distributor, and sales did not materialize.
This year they have changed course
and aligned themselves with GTSI Corp (NASDAQ: GTSI), a company
that specializes in IT products for Governments. GTSI enjoys $1
billion in annual sales.
Today AGSI announced a slew
of individual sales for Radio Bridges. Purchases were made by City
of Colonial Heights, VA Police Department, a Utah County Fire Department,
The County of Northumberland, and The Space and Naval Warfare Systems Center
in San Diego in support of the Office for Domestic Preparedness.
This company is finally starting
to get a little traction. If they can manage to sell a mere one thousand
of the Radio Bridges over the next year, it will translate into over $6
million in revenues.
The chart is interesting as well.
The stock has made a nearly perfect 61.8% retracement off a mid June move,
is now putting in a double bottom in this range, and could be getting ready
to move back up. As you can see from the bottom bars, volume has been picking
up.
Look for the GTSI relationship
to put this company on track. Lots of upside from these levels, but probably
still a little too early for short term traders.
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VirTra
Systems (OTC BB: VTSI); Technically, Same Story |
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VTSI has a similar story to
AGSI.
Great product- sales cycle taking longer than expected. Chairman Kelly
Jones was extremely upbeat in a conference call two weeks ago, and the
stock has a loyal following.
I really like the double bottom the
stock has made in the $.19 range in late June and now. This tells me the
stock is getting ready to begin a significant rebound phase. This is a
very low risk entry point.
Based on the conference call, it
is relatively safe to assume this company has some major positive events
in the crosshairs. However, there aren't any to report today.
Here's an opportunity to put a little
stock away while it's still cheap and no one wants it. It's a great microcap
accumulation method for companies you like. Then, when I report a blockbuster
sale to a major branch of the US Military and the stock starts to move
up the charts, you can be a seller is you so choose.
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