To OTC Journal Members:
 

Commerce Planet (OTC BB: CPNE); Deja Vu All Over Again?

Summarizing what Commerce Planet has achieved in 2006 is an eye opening exercise, and makes one wonder just how high this stock could go. Here's a table that illustrates the progress the company has made so far this year:
 

The numbers speak for themselves with each successive quarter in 2006. Huge quarter over quarter revenue growth. At the $7 million pace, revenues look to quadruple 2005's totals. Also notice that with each successive quarter debt has gone down, earnings have come up, and cash has risen in kind.

Furthermore, since the June quarterly numbers came out, CPNE has paid off its long term debt entirely, thereby strengthening the balance sheet and paving the way for even greater profits.

I'm publishing this edition now because Q3 earnings are coming out any day, and I believe if you don't own this stock or want to own more, now is the time to act- before the news hits the tape. Just look at these charts and decide for yourself if you agree. Here's how shares of CPNE have responded to the last two quarterly earnings releases in 2006:

On the left is a chart measuring CPNE's performance over the two months following the Q1 earnings release. Note that the stock was trading at about the $.20 level the morning of May 8th, the day on which the earnings release came out.

Two months later the stock traded to a high of $.60. That's a flat out triple over two months. No two ways about it. Now, let's move on to the Q2 numbers.

Q2 earnings came out on August 2nd. The stock was trading at $.50 at the time. Two months later guess what- the stock made a high of $1.80 - this time more than a triple over the level the stock was just prior to the earnings release.

When you look at the facts of the financial performance and the pattern of the way the stock has traded you can come to only one conclusion- if the pattern repeats itself for a third time in a row, this stock needs to be accumulated right now, just prior to the earnings release.

It's not as if the stock hasn't corrected and given investors a window of opportunity to get in. It was trading at a new multi year high of $1.80 in mid October. The stock came down rather violently in a couple of days, and has since rebounded. It is currently trading in the $1.30 range.

Will history repeat itself for a third time this year? I can't say for sure. However, if you look at the charts and combine them with the table that measures the corporate performance, I believe one can assume this trend will continue until proven otherwise.

If history repeats itself, earnings will come out any day now. Friday or Monday could be your last chance. I don't know for sure, but I believe the company will report another quarter of growing revenues and the highest profits in their history by a long shot.

The company reported $.035 per share last quarter. If they had not paid a one time fee of $1 million for early repayment of their debt, they would have delivered about $.055 per share in earnings. Let's say CPNE delivers $.06 per share in Q3- that equates to $.24 in annual EPS. With any sort of significant growth rate you can easily put a $5 price on a stock with $.24 EPS annually. There's your long term price target.

Do you want to know if I still have a $2 price target on the stock for 2006?- ask me after the numbers come out.
 

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