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(OTC BB: UCMT): Steps Up To the Plate- Again
Let's face it, out of the gates Universal
Cap has been the first new idea to strike out in a number of months.
Perhaps we are getting spoiled- after all, the OTC Journal was on
a tear for a number of months: We had the 9 month rocket with CPNE,
followed in September by PNWIF at $1.80 (now $4.40), TTGL at $1.80 (now
$2.20), and EFSF at $.20 (now $.38). They all traded very well in pretty
short order. The only loser over that time frame was TTNUF.
Now, along comes UCMT at $1.55-
I introduce the idea, it trades to $1.80, and then falls back all
the way to $1.20 in the first two weeks. Clearly, not what we have
become used to.
However, it's only the first innning
in a nine inning game, and all that's happened is UCMT struck out
in its first plate appearance. One for three gets you $10 million
a year in baseball.
I continue to believe this is a great
long term investment for microcap lovers- when microcaps get hot you have
a diversified, agressively managed portfolio and a managment team that
is adding assets hand over fist. Their NAV has grown quite dramatically
over the past year, and the stock remains very undervalued relative to
the only comps out there in the marketplace: specifically Harris &
Harris (NASDAQ: TINY) and Utek (AMEX: UTK).
Despite having a rough start over
the first two weeks, UCMT delivered the kind of news post close
on Friday that could get this stock on many more investor radar screens.
UCMT announced it has acquired
another company to add to its portfolio, and this one will be going public.
Free trading shares of this new acquisition will eventually be awarded
in dividend form to shareholders of UCMT. I believe it is a tax
UCMT announced it added SP&S
(Scientific Products and Systems) to its portfolio of companies at
the end of April. UCMT plans to do an IPO spin out of SP&S
as soon as feasible. Part of UCMT's portfolio shares will be spun
out to shareholders of UCMT. Hopefully, you are, or will be, one
SP&S has specially patented
drug dispensing technology. It's used where precision is required in the
dental and medical fields. The technology has been FDA validated for dispensing
cancer drug and live virus products. It also has widespread applications
in the dental market.
I am not in a position to evaluate
the merits of SP&S, but I know UCMT has gone through
the company with a fine tooth comb, and feels there is substantial upside
for shareholders. UCMT only needs huge wins on a couple of these
to have a surging stock. When SP&S gets added to the portfolio,
the NAV goes up, as do sales and earnings.
Here's a pretty busy chart of UCMT.
As I observed in the original presentation, this is not a well known stock,
and therefore doesn't trade a lot of volume; yet. As the company grows,
so should the audience.
On the left side of the chart is
the big gap from the first day I covered it. It was all downhill from the
opening print at $1.80 until just a couple of days ago.
There are only 5 million shares I&O,
and really only about 1 million of those are publicly traded. The majority
of those million shares are held by long term investors, leading to a miniscule
effective float for this stock.
In the nine months this stock has
traded, there has never been any volume, so when it started to trade a
little there were a few sellers who had never had an exit strategy. Isn't
it always the same- you invest, wait, wait, wait, and wait. Then, as soon
as you finally throw in the towel and sell, the stock turns around and
rockets. It's an unwritten rule of investing.
So, the sellers got out. How do we
know they are out? look at the stock's behavior over the past couple
of days- it moved from $1.20 to $1.50 on almost no volume.
It only took about 15,000 shares to move the stock about $.30.
Watch this one run up the flag pole
on Monday as the news of another portfolio client gets out, and investors
notice the easy rebound in the stock. This one will continue to be volatile
and make big moves on very little volume.
I still believe it is going to $2.25
in pretty short order. The initial cancer has been cut out, and the patient
appears to be getting healthy quite rapidly.
The first at bat was a strike out,
but it's now the third inning and there's another chance for a home run.
Participate on Monday if you're not in already.
Here is the complete text of Friday's
news for your review:
|Press Release Source:
Universal Capital Management, Inc.
Management, Inc. Announces the Addition of SP&S (Scientific Products
& Systems, Inc. to Its Portfolio of Companies)
Friday May 11, 4:01 pm
WILMINGTON, Del., May
11 /PRNewswire-FirstCall/ -- Universal Capital Management, Inc. (OTC Bulletin
Board: UCMT.OB - News), a Business Development Company which provides emerging
growth companies with management and strategic resources for successful
growth, announced today that it has added SP&S (Scientific Products
& Systems, Inc.), to its collection of portfolio companies. The actual
transaction occurred on April 27th 2007.
Universal is planning
to do an IPO and dividend spinout to all of UCMT's shareholders at the
appropriate time pursuant to a fully registered offering of SP&S common
stock and or rights offering. Universal is planning to use this combination
of an IPO and dividend spinout for its private portfolio companies when
they are ready to enter the public marketplace.
Products & Systems, Inc.) offers its OnePump technology to pharmaceutical,
bioscience, dental and other markets for precision liquid dispensing. SP&S
believes this patented technology provides its customers the world's most
accurate dispensing platform. SP&S has filed over 15 patents with three
patents having been issued on its core technology. Currently, for example,
the dispensing systems have been FDA validated for dispensing injectable
cancer drugs. OnePump systems also are used to dispense live virus and
dental syringe products. The OnePump products are being used in worldwide
markets in the United States, Canada, Spain and in China. The company has
been requested by its customers to provide more than the precision pump
portion of the solution, so it has developed a OneBloc processing platform
of equipment for its markets. The OneBloc system was jointly developed
with Hengsin MA, China, and was introduced at the New York Interphex show.
"We are very excited
with having SP&S join our portfolio of companies. We anticipate SP&S
to be a world leader of reasonably priced pharmaceutical processing systems
based on its intellectual property and the association with HengSin MA,"
said Joseph Drennan Vice President of Universal Capital Management.
The information contained
in this press release may contain "forward- looking statements." You can
identify these statements by use of the words "may," "will," "should,"
"plans," "explores," "expects," "anticipates," "continue," "estimate,"
"project," "intend," "believe," and similar expressions. Forward-looking
statements involve risks and uncertainties that could cause actual results
to differ materially from those projected or anticipated. These risks and
uncertainties include, but are not limited to the following which could
affect Universal Capital Management, Inc. or one or more portfolio companies:
general economic and business conditions, effects of continued geopolitical
unrest, competition, changes in technology and methods of marketing, delays
in completing various engineering and manufacturing programs, changes in
customer order patterns, changes in product mix, continued success in technological
advances and delivering technological innovations, shortages in components,
production delays due to performance quality issues with outsourced components,
and various other factors beyond the Company's control.
Source: Universal Capital