To OTC Journal Members:
 

In the News- Two Of Our Favorites Make Fundamental Progress

Followers of the OTC Journal know we have focused most of our attention on penny stocks as we wait for sanity to return to the markets. We believe good old fashioned penny stocks can provide opportunities to make both short and long term profits.

Two of the penny stocks we have been following recently have both had outstanding developments this week, and both stocks are behaving as if they want to trade higher. While it is tough to predict short term price movement, we believe both of these stocks will be considerably higher over the coming months. Both company's fundamentals are improving, and both could easily provide 100% plus returns over the next six months from current oversold levels.

As follows:
 

StockGroup Information Systems (OTC BB: SWEB) Lands Major New Contract

Stockgroup, our current profile, is a company we believe has evolved its business model. Click Here to read the profile. Founded as a traditional dot-com who's model was predicated on advertising revenues, the company has leveraged its $40 million investment, and has evolved into a financial information service provider for other major companies. Clients include American Express, Citigrup, NY Life, and many others. The transformation has been completed, but it has not been reflected in the price of the stock.

At current levels, the market is only valuing the company at $2.37 million. Several more press releases of today's magnitude could easily put this stock into the $5 million market cap range, which would represent nearly a double for investors from today's levels.

Today, just before the market opened, StockGroup announced it has succesfully landed another major client. National Bank Financial of Canada has signed a major licensing agreement with StockGroup.

National Financial has 86 branches, 2700 hundred employess, and has been in business since 1859. The firm manages $35 billion in assets spread over 275,000 individual clients.

Once implemented, StockGroup will be providing a complete suite of market data tools will benefit their clients by providing them with market data research tools such as, Stock Screeners, Mutual Fund Screeners, Technical stock analysis, Market Indices, Stock Charts, Stock Watch Lists, Portfolio Managers, Market Movers, Scrolling Tickers and much more.

Although dollar amounts were not disclosed for competitive reasons, this contract has the potential to add 10% to the annual revenue stream of StockGroup. The company's business model is evolving into one akin to a utility. The infrastructure costs have been absorbed. As more customers are added, revenues grow with minimal cost increases. 

Several more contracts of this magnitude would allow the market to assign a $5 million value to this company with little difficulty even in a hostile climate. Full text of news release at the end of this edition.
 

XML Global (OTC BB: XMLG)- Pull Back After 10K Filing Provides Great Opportunity

XML Global, which has been camped right at the $.20 level since June, dropped at the end of September as the company filed its 10K audited financial statement with the SEC. 

The 10K contained the audited financial statement as of the end of June, and investors made the mistake of assuming the company's financial condition then was the same as it is today. They were wrong, and the knee jerk reaction from short sighted investors is an opportunity for you.

Since the end of June, XML Global has received payment on the largest single contract is history- a single sale for $500,000. In addition, XML announced a private placement for $2 million, a major feat in the complete absence of investment capital. The company sold restricted shares for $.20, a price equivalent to the open market purchase price at the time. At the beginning of September, $1 million of the private placement had been completed. The balance was to have been completed by the end of September.

With the stock dropping below the $.20 threshold, investors were concerned the remaining $1 million would be in jeopardy. They were wrong. In an 8k filing with the SEC last Friday, it was revealed an additonal $300,000 of the remaining $1 million balance was received, and the venture fund paid the agreed $.20 per share despite the stock trading at a considerable discount to that level at the time. Click Here to read the SEC filing.

Many things in today's market don't make sense. If a sophisticated venture fund is willing to buy restricted shares of XML Global for $.20, why shouldn't you be willing to invest at $.15 for free trading shares? The market pricing is absurd.

The 10Q financial statement of XML Global for the end of September will give investors a much better look at the financial condition of the company. Based on their current burn rate, cash in the bank, and increasing sales this company should have enough money for at least the next two years if business does not improve at all.

Despite the lack of activity in the IT sector, XML Global makes software which saves companies money. Demand is increasing, in part thanks to their joint venture sales agreement with Sun Microsystems (NASDAQ: SUNW). Despite the poor performance of its stock, Sun still enjoys over $12 billion in annual revenues, a good partner for a stock which trades at $.15.

The chart indicates that knee jerk sales from short sighted investors are exhausted, and buyers are cautiously resurfacing. Look for a quick rebound to the $.20 level, where the stock likes to be for the time being.

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Click Here to view our compensation on every company we have ever covered, or visit the following web address:  http://www.otcjournal.com/disclaimer.html for our full profiles and http://www.otcjournal.com/trading-alerts/disclaimer.html for Trading Alerts.

MarketByte LLC has received no compensation in the form or cash or securities for coverage of StockGroup Information Systems. Currently, there is no formal relationship between the two parties. Both parties are contemplating an informal relationship wherein MarketByte may receive benefits in the form of advertising and/or technology services. This should be construed as a potential conflict of interest. MarketByte LLC has been paid the following fee by XML Global for a year of representation extending from February 2, 2001 to February 2, 2002: $100,000 cash, 60,000 shares of free trading stock, 60,000 shares of restricted stock which are now free trading, and 60,000 options exercisable at $2. The 60,000 shares of free trading stock have been contributed by a third party on behalf of the company. MarketByte's contract to represent the company expired February 2, 2002. The contract was renewed for another year, and XML Global has paid compensation of $20,000 in cash and one million shares of newly issued restricted common stock. Please review our policy on selling shares found in our Mission Statement on our home page.

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