To OTC Journal Members:

Normally, I like to provide a feature edition on a company, one company at a time. However, there was great news out of my two favorite penny stocks this morning, so I was forced to combine the two news events into one edition.

Today's news clearly demonstrates both of these ideas are delivering growth, and growth is what the market likes. Summer is nearly at an end, and I expect the usual Q4 rally with both of these stocks participating. Read and decide for yourself- growth and positive corporate developments often lead to price appreciation.
 

eFoodSafety (OTC BB: EFSF): Rolls Into Rite-Aid

Ready for EFSF shares to start behaving a little better? This morning should be a heck of a good start. Why? Because EFSF disclosed this morning that Cinnergen has been picked up for distribution to 3000 Rite Aid drugstores by mid September.

There's not a heck of a lot more I can say about this news. Clearly, it is taking some time for Cinnergen to get traction, but it's starting pick up now. Cinnergen is clinically proven to help control blood glucose levels, which means it helps your body process carbs much better. Hence, it is a helpful weight control product. Once it becomes viral as a weight loss product, sales should rocket. 

I wouldn't be surprised to see the stock trade back to the $.35 range on this news, as technically it looks perfectly positioned.
 

Nighthawk (OTC BB: NIHK) Quarterly Numbers Prove Out Growth Picture

NIHK's Q2 numbers did not disappoint. In fact, they confirm my argument that NIHK is delivering growth, and growth generally equates to an improving stock price.

The top line number for Q2 was $340,000. It's not a huge number, but it's the trend that's important, and here's the trend. This number is a 60% increase over last quarter, and a 35% increase over the same quarter in 2006. 

Slowly but surely, NIHK's remote disconnect products are being adopted by the utilities industry, and sales should continue to accelerate into the back half of 2007- which was by far the stronger part of the year for NIHK in 2006.

There are several other positive trends one can derive for the quarterly filing- First, their debt is going down, albeit very slowly. In each of the past two quarters their debt level (currently $1.8 million), has been reduced by about $50,000.

Here's another positive you would really have to dig in to find. Their debt is convertible into common stock, which is why the number of shares I&O has gone up. There is dilution going on. The conversion price is going up substantially for the current round of financing to somewhere in the $.07 to $.09 range. This means the stock must go higher if their financier is going to continue to enjoy the same rate of return, and there should be less for sale. This is a major positive for the stock price.

As you can see from the chart, NIHK has a nice little uptrend going in the month of August, which has been a very tough time frame for many stocks. That's very bullish. The lows are getting higher, and the highs are trying to get higher.

My suspicions are NIHK will provide shareholders with another one of its outstanding breakouts in the not too distant future. 
 

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