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Comments in the BLOG

It's not posted yet. I have just returned from a long holiday weekend, and don't have the energy to put together some intelligent comments on the recent meteoric move in CPNE. However, check the BLOG about an hour after the open tomorrow, and I'll have some comments on trading expectations. Love the action in the stock. For traders, the current move with Thursday's announcement looming could be an opportunity.

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.
 

Now We Know- PhotoChannel Flying (OTC BB: PNWIF)

They are not huge numbers, but the percentages are, and Wall Street loves meteoric growth. I'm not sure what the expectations were, so I don't know if the stock will be up or down in tomorrow's action. However, PNWIF has been trading as if investors believe this rate of growth will continue- if so, the company should deliver some pretty exciting numbers throughout the course of 2007.

Today, just after the close, PNWIF announced spectacular growth in their fiscal Q1, which is our calendar Q4. Another words, these are the holiday numbers.

The top line- $1.56 million for the quarter. Doesn't seem like a lot for a company trading at a $133 million valuation. However- here's the market's focus: 347% growth of transactional revenue over the same quarter the previous year. That 2 cents the company makes off every print ordered through the web sites it maintains on behalf of customers is growing at an astronomical rate. At this rate of growth that number could be $5 million per quarter in fairly short order, and that's what investors are banking on. If they can get there, the profits would be extraordinary with their low overhead business model.

Imbedded in the 347% growth rate is the additional business coming through CVS, Kmart, and others. However, PNWIF also disclosed there was a 148% growth rate of transactional business from already existing retailers. This is further evidence the market for the "Online to Retail" segment is rapidly being embraced by consumers. Upload your pictures and pick them up at your local store in one hour.

And, oh yes, the company made money. The press release disclosed "positive EBITDA"- not a specific number. Since they have no long term debt, they pay no interest, and they are positive cash flow. I will have to dig into the financials to come up with a specific number. We'll look at that in a future edition.

So, here's what we know. The stock has been on a tear since I first introduced it back in late September. The chart goes back to the first OTC Journal edition at $1.80.

Here's what I don't know- will the market be disappointed by the top line and sell the stock off? Or, will the market be impressed with the growth rate and push the stock to new highs.

I can't wait to see how it does in the morning. The market has priced this company as if it will land more major retailers for customers in 2007, and the growth rate will continue.

I will withhold comments on the trading side until I see the action over the next couple of days. If the market doesn't like these numbers and the stock sells off, that will be an opportunity to get on board.

In my view as you can see from the technical retracement levels, the stock could pull back all the way to $3.42 and still be in a uptrend. My current SSL therefore would be $3.10. Around $4 might prove to be a great level to load up. However, it might just take off and try for new highs.

As I said, the next few days will be interesting. I believe any pullback will be shallow and short lived.

Here's today's press release for your review:
 

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