I’m travelling today and already late for my first meeting, so I can’t give you any real feedback on the NIHK quarterly report.

However, it shouldn’t be that complicated. Revenues are way up, and losses are down. One of the biggest expenses now is dividends on preferred- which is being paid in shares- this could represent more supply for the market to wrestle with, but that’s the price of poker.

I’ll craft more thoughts when I have some time to look at this one. For the time being, I still believe owning this stock is like owning an option that doesn’t expire.

Submit and comments or questions, and I’ll get on it next week.

NIHK finally came out with its long overdue 10k. I don’t quite understand why companies cannot get these things out in a timely manner. Every CEO knows- if their year end is on the calender year, that their numbers are due out by the end of March to be compliant. Then, you can get a two week extension without penalty. If you falter from there, the consequences can include losing your listing.

At the 11.9999th hour, NIHK Doug Saathoff finally delivered, and the news is bringing some life back to the stock.

I am going to have to dig into the financials to come up with some comments on how they are performing. The losses were quite severe, but you have to differentiate between operational losses, and one time cash and non cash expenses associated with the acquisition of the set top box business. Then we can get a feel for the overall health of the business.

I won’t be able to grind through it until later tomorrow, so expect a BLOG on it perhaps Friday with more useful information.

In the interim, of particular note, is the associated press release wherein CEO Saathoff forecasts $10 million in revs this year. If gross margins remain at 23%, this would imply the company will generate $2.3 million to cover costs. And, they expect to turn (dare I say it) profitable by Q4. I don’t know if Mr. Saathoff means cash flow positive or EPS, but I will endeavor to find out.

While the stock hasn’t quite traded 1 million shares yet today, it is finding some support, and looking like it could try to move higher.

More probably on Friday.

NIHK ended a long period of silence today with very significant news- the kind the market should embrace. Apparently, the set top box business is coming along very nicely, and can we start to think about NIHK finally turning profitable?- no, scratch that- cash flow positive in 2008?

In today’s news about the follow on order for 1500 desktops, Doug Saathoff predicts the company will generate $8 million plus in revenues in 2008- this from a company that was barely able to scratch out $1 million in revenues over the past several years.

$8 million in revs should generate about $3 million in gross profits- a number this little company that could has never seen.

Year end numbers will be quite interesting as we will get our first look at the new company balance sheet with the debt associated with the acquisition of the set top box business.

The stock is finally showing a little life today after a few months of very listless trading with a bias to the downside. Pretty much sounds like every microcap stock to me.

Here’s a chart:

As you can see, the stock has been chopped in half going back to October, which is when the Bear Market really started.

Today’s move is very promising technically as it represents a break out above a pretty long term downtrend line.

However, I’m not seeing enough volume for this to really jell into any sort of big move. We’re just not in that kind of market.

For long term shareholders, this is great stuff. It’s faith time- do you have enough faith to believe the fundamentals will eventually turn into much greater volumes in other markets ahead?

If so, this is a great one to accumulate for the next bull market in micros, which might not be all that far out into the future.

Comments and questions are welcome.

Let’s see- NIHK recently announced its highest revenue quarter in four years. Then it announced the single largest order in its history. Then, it announced it would be shipping the hi-def hospitality industry set top boxes in December, which means the December quarter will also be the a new record high top line.

Sounds like NIHK is really getting its act together on the fundamental side. CEO Doug Saathoff is talking about a new day for NIHK in 2008 as the company finally plows through the excess supplies of stock, generated by 4 years of losses as they have been building the company.

Where’s the turning point? When does the company stop creating excess supplies of stock? When does the stock break out, and generate the big run NIHK fans have come to expect on an annual basis?

They say timing is everything. The timing on the last serious of events out of NIHK has been bad from a market point of view- we had a great run in equities Sept through mid Nov, been since then investors have been very reluctant to reach into their pockets and start bidding for oversold stocks. The “headline” shock is pervasive everyday.

For those who are becoming impatient with the stock and are wondering why it didn’t trade better on a 2 million share day- I suggest you look at the past patterns in previous runs- the volume simply needs to be higher. Here’s the chart:

Look at the huge spike from last March- note- it was accompanied by many days where the stock traded 9 million shares plus.

We need a more microcap friendly market tone for a repeat of this performance. Everyone has their hands in the pockets, afraid to jump in right now.

If you sell the stock right now it’s more of an overall market call than a call on the company. The company is doing great.

If you have the intestinal fortitude to wait it out for another month, past the tax selling and the daily sub prime shock which is winding its way down, you are in for better days in my view.

In this market, we won’t get the big run. Most of the damage is done, and the next market is coming.

Comments and questions are welcome.

When looking at any investment in any class there are always two parts to the formula- risk and reward- or upside vs downside.

Folks are continually canvassing my thoughts on NIHK- most want to know when the stock will have another of its annual run ups that really excite the inner “trader” in us all.

That’s the upside. I had a chance to review NIHK’s recent 10Q filing for the September quarter, and I was struck by one of the key themes of owning NIHK- the other side of the equation- the downside. For a stock which likes to trade between $.08 and $.12, there doesn’t appear to be a lot of downside from the fundamental side. There’s always market risk, but the company is delivering growth as promised.

Revenues for the quarter came in at $360k- not a big number, but a growing number. In fact, it was NIHK’s highest quarterly top line in four years, and 59% ahead of the same quarter in ‘06.

Losses were way down from previous years, and shareholder’s equity continued to show improvement as well. In short, they are getting traction with their remote disconnect products in the Utility industry.

It is also important to recognize that the recent acquisition of the set top box business, which promises to deliver millions in revenues, is not reflected in this quarter. When we see their year end audited numbers, the balance sheet will have undergone a complete transformation. The top line for Q4? it depends on whether they deliver set top box orders in December- if they do, they will have an all time record quarter.

As you can see from the chart, $.08 has been a low risk level to accumulate NIHK over the past year. Can it drop below that level? Sure. Perhaps the stock wants to trade between $.08 and $.12 for the next six months. I don’t know for sure.

However, I do know the company is delivering on the risk side of the equation. As their numbers improve quarter after quarter, the risk side of the equation diminishes. The stock seems to have upside around big events the company has pulled off in the past that have promise for investors. They are due to pull another rabbit out of their hat in the not too distant future.

With the market getting absolutely hammered over the past month, there is more of a buyers strike than a sell off in the stock. A great time to accumulate at the right price.

Comments and questions are welcome.

Ever heard the buzz phrase “Horizontal Market”. Wonder what it means? It references a company who sells its products and/or services to another industry group outside it’s primary target.

In the case of NIHK, the primary market for their remote disconnect technology is Utilities- their technology allows utilities to switch services on and off wirelessly and remotely, now using an internet interface.

They have made some moves into horizontal markets in the past, and each time the stock traded very well. For example- the stock traded up when they announced DaimlerChrysler would install their remote disconnect technology in the fan systems in one of their huge factories.

Another instance was the remote disconnect technology installed on the back up generators on Verizon’s cell towers in New Jersey. Let’s hope that contract expands in a big way.

This past Tuesday morning, NIHK announced another move into a horizontal market. It seems American Traffic Solutions likes NIHK’s remote disconnect products for photo traffic enforcement- they can switch it off and on from a remote location using an internet interface. They ordered systems and are installing them.

Still small- yes. Growing- no doubt- New Markets developing- definitely. Here’s the chart:

As you can see from the trend line, the stock is trying to reassert itself and climb back up towards the $.10 mark, and then hopefully higher.

As all of you know who have been following this one, when the volume comes in, it really comes in.

More news like Tuesday morning’s just might have us cruising back in the right direction.

Comments and questions are welcome.

NIHK is a fan favorite, and I know many of you have been waiting for an update, just itching to pull the trigger and reload after trading out at twice today’s price.

One thing I have learned over the years- The wonderful surge we had in NIHK comes along once or twice a year when technical conditions fall into place perfectly.

You always think the stock is ready to do it again right away- but guess what- it’s not going to. It’s going to take some time for forces to build up.

Another thing I’ve learned- when stocks run up, they run up higher than you ever expected. I never thought we’d see a $.24 print in this stock so soon. The stock was going up on momentum rather than merit, which is a good time to sell.

On the flip side, stocks generally go lower than you thought possible on a pullback, and that’s what I have been waiting for with NIHK. Looking to see where the bottom would be.

Lately there have been two kinds of sellers- some shares have been hitting the market from financiers- this will go on for some time as the company is not yet profitable and still needs to raise capital. The other kind of seller has been those who bought the stock on its way up in April, and is selling because the stock is down and not moving right now. If you have been following my counsel on this one, you should have been a seller when those goobers were buying at the top, and they are playing right into your hands- allowing you to accumulate while its cheap and no one wants it. It’s the best way to accumulate a microcap.

Now that I have watched NIHK for a few weeks, I believe it doesn’t want to trade much, if any, below $.10. Therefore, I believe it is time to jump back in and accumulate. Don’t do so if you think the stock is going back to $.24 tomorrow. It would take some big news for that to happen.

Here’s this morning’s chart, along with a couple of things I like about it:

The stock finally drifted back down to the $.10 level, traded a touch below, and bounced right back up. That’s the bottom I was looking for.

In the meantime, the daily volume has dried up considerably, suggesting those who bought too high have already thrown in the towel if they were going to, and their loss is your opportunity.

Today, pre open, NIHK announced another utility order. Slowly but surely their utility network is expanding, and the re orders are coming in on a more consistent basis, and in larger quantities. Some of these utilities are installing, then moving on to the next batch of installations. This is becoming almost like a recurring revenue model.

Recently, Mercedes Benz reordered after completing the first installation- it’s not really big, but it’s good sign their product can be adopted in other arenas.

There will be more fundamental information down the road. I still believe the company can hit the $2 to $2.5 million level this year without any really big deals, which would be at least a double over 2006. That’s why there isn’t a huge amount of risk in the $.10 range.

The upside and the next big run: when they deliver a really big deal, of which there are about 10 under consideration.

I like our chances, I just can’t say when. No need to pay more than $.11 at this point in time.

Comments and questions are welcome.

I just love the NIHK chart. Once again, the 61.8% retracement proves to be the low risk entry point for a stock.

If you are a follower, you probably noticed NIHK announced it had taken over $300k in orders in Q1. This doesn’t mean they will deliver $300k in sales, but it does mean they are continuing to grow at a healthy pace. As I have been saying, NIHK is likely to double in size in 2007 without any mega orders, and start the process of evolving to a recurring revenue business model.

On the news, NIHK, which made a big run, fell back, and was then a little oversold, bounced nicely.

Here is the chart:

As you can see, the stock made a beautiful surge, and then fell back to a high low. It did trade a little below it’s perfect 61.8- but close enough.

Note the nice bounce yesterday as the news restored everyone’s faith.

Love the way this one is trading. Continue accumulating on dips for a shot at $.25 later this year. They have a few home run potentials, but easy to hang on to with the numbers improving on the singles.

Comments and questions are welcome.

NIHK finally filed its only slightly delinquent annual audited financial statement last night, and things were pretty much as I expected them to be.

As I have said all along, my expectations are for NIHK, as a minimum, to double its sales levels from 2006 to 2007.

I was expecting to see perhaps $1 million in revs for the first time in ‘06, but they came in at $900k. This means they did about $300k in Q4- which is the most they have ever achieved in their entire history in one quarter. Always nice to see.

Of even greater importance- and a pretty good achievement- their convertible debt level came down by nearly $1 million in Q4-from $2.8 million to $1.9 million. That’s simply great to see, and it will no doubt come down considerably more in Q1. The stock’s recent strong performance for both volume and price will aid that picture considerably.

I am pretty excited about the possibilities for 2007- as CEO Doug Saathoff notes in his press release concerning the numbers- the company has expanded its base of existing customers in the utility space, and uncovered a number of new applications for its technology outside the utility space. There are a number of home run possibilities looking out into 2007. Many more than we had at the beginning of 2006.

NIHK has been backing off a bit of late. Investors were reminded with the filing of yesterday’s 10k that Nighthawk is still a little company with pretty big potential.

Based on the current I&O- which stands at about 96 million- we can figure there are 100 million I&O, and that number will probably continue to climb. Therefore, at $.20, the market was placing a value on Nighthawk of $20 million. It was, perhaps, a little ahead of itself.

The stock pulled back a little as I was cautioning everyone it probably would, and here’s the chart as of today. No big surprise- look what happened when it hit the 61.8% retracement of the recent run:

The stock hit the $.14 level, which was the perfect 61.8% retracement, and bounced. This works nearly every time.

As I cautioned everyone when the stock was trading at $.20- investors were buying because the stock was going up- not because they liked the company.

You need to like the company first, then accumulate at levels that give you upside.

I still believe NIHK can be a $.25 stock in 2007. They just need an expansion of sales down some of the roads they are pointed towards. Factory ventilation with DaimlerChrysler could lead to bigger and better sales. Cell phone tower generator remote starters with Verizon could be in the pipeline. EL Paso G&E could greatly expand the recurring revenue model, and the utility sales could really take off.

$.14 seems like a much better level for accumulation with a $.10 SSL. The stock is behaving pretty much according to the book.

NIHK- wow- trading up far beyond my expectations. Awesome. This is some bird. It’s really flying.

You might be thinking I made a bad call. I suggested a partial or full sell on the stock April 2nd when it traded up to $.16. Today it hit $.24 at its absolute peak, and is now hanging in there around the $.19 level.

Being wrong about the top is kind of a high class problem- like having to pay too much in taxes. If that’s the biggest problem I ever have to deal with in the microcap world, then life will be beautiful from here forward. I’ll live with it. Sorry.
If you own this stock from when I first featured it in the Fall at around $.04 it is still probably prudent to make a partial sale.

Right now, NIHK is going up because it is going up. The kind of investor who buys a stock because it is going up is the same kind of investor who will sell a stock because it is going down. A lot of the hot money at $.24 is probably going to sell at $.18. If you liked it at $.24, why would you sell it at $.18?

Here’s today’s chart:

As you can see, my suggestion to lighten up on April 2nd at $.16 was a little premature. However, this is the chart of an overbought stock that is due to correct.

I have been getting a few emails from members on the upside of the equation- I have seen charts suggesting the stock is going to $.29 on this move.

Perhaps it will. In any case, it’s a whole new day for NIHK- the bar has been set considerably higher than in past years, and when it does correct we will be starting out from a much better level.

Today, I believe NIHK is more of a sell than a buy- simply on a technical basis. If the stock falls back, my view could change in short order. When it’s time to load up again, it will be at a much higher level than on past pull backs.

Comments and questions are welcome.

Welcome to microcap stock trading 101. The introductory class.

Now, class: What do we do when stocks we like are cheap, quiet, and no one wants them? We buy.

What do we do when stocks we bought cheap are making big, spiky runs on high volume? We take some money off the table. You know why? Because the stock will get cheap and quiet again.

Here’s today’s chart of NIHK:

My price target on the stock was $.13- longer term $.25. Today the stock is trading at $.15 on big volume after making a big, spiky run.

So, in order to move on to the next class- trading 201, what do you do? Take some profits if anything.

You don’t have to sell it all, and it could power higher. However, now, would be a good time to take a few bucks off the table.

Comments and questions are welcome.

Baseball season is nearly upon us, so I can drag out the baseball metaphors. I’ve been getting requests for an update on NIHK, so I thought I would comply.

Not all major league baseball teams get to the World Series with home run hitters. The 2003 Florida Marlins come to mind- they became world champions with great pitching and by playing “small ball”- executing a lot singles, sacrifices, and hitting with runners in scoring position.

Since the big announcement of the cell tower installations in New Jersey, NIHK has been hitting a lot of singles. For example, NIHK has recently announced sales to City Water, Light & Power (”CWLP”) of Springfield, Illinois, Cotton Electric Cooperative of Walters, Oklahoma, and Denver-based Wisper Telecommunications.

While none of these are home run hits like the Verizon cell tower deal in New Jersey, these singles keep the base runners in motion and the score climbing.

Here’s the current chart:

You can see the first surge and then the second surge the stock made over the last 2 months. Each successive surge took the stock to a higher high.

For the last month the stock has been idling. It is extending out to the right with no major price movement.

As long as this stocks stays above this $.08 level it’s a buy if you believe in the future of the company.

If you accumulate it today you will be in a position to knock one out of the park when the company delivers the perfect pitch. A walk off homer if you want to take your profits.

In the meantime, the singles the company hits limit your downside risk and keep the top line moving forward.

I would accumulate this stock in here with a Stop loss if it trades much below $.08.

Comments and questions are welcome.

NIHK has cooperated fully, and I don’t often get to put that in writing.

Today’s message is simple- in my view the HAWK is more of a sell than a buy at this point.

For those of you who have been following my writings, you know my target all along has been $.10. It has been trading above that level for the last two days, so if you want to take a profit now is the time in my view.

If you have been following my BLOG you know I recommended a buy on NIHK in the $.03 to $.05 range. I suggested avoiding when it first ran to $.09. I said buy again in the $.055 to $.065 range.

Here’s where I would buy it if it comes back down:

As you can see from the chart, the 61.8% retracement level from this last big move is about $.08. This is a great chart as the highs are getting higher, and the lows are getting higher.

Nevertheless, a little patience is in order here. Of course, the risk is the company comes up with another big deal and the stock streaks ahead. That is entirely possible. Or, perhaps they expand the cell tower program to other states. That would no doubt put a charge in the stock.

Everyone who followed my trading advice should at least have a double in this stock right now. We might be able to play this one for a number of months following the same pattern.

Comments and questions are welcome.

The “Hawk” was out this morning with an announcement concerning the cell tower deployment in New Jersey.

Verizon Wireless (yes, I’ll say it) made its initial order for systems to cover their cell sites in Nothern New Jersey so that Verizon could comply with a new New Jersey law preventing the use of diesel generators on pollution heavy days.

The diesel generators are used as backup in the event of a power failure on cell towers. Currently, the generators are started up on regular intervals by a timer to keep them healthy. With the limitations from the new regulation, Verizon was forced to find a way to start and stop them on demand remotely.

The initial installation was successful, and Verizon has now ordered additional units to cover their needs in Southern New Jersey. I am not sure of the number, but I know it is hundreds if not thousands, and it was the Hawk’s largest single order in 2006.

While the order is nice and certainly has the stock moving in the right direction, it far greater implications long term if the Hawk can expand this program beyond New Jersey. It’s not a huge invesment on Verizon’s part- only roughly $1,000 per cell tower, and could be implemented on a more wide ranging basis with more carriers.

Here’s a chart as the stock is trading in the first 15 minutes of the day:

The stock has made a nice break away gap and volume is growing rapidly. Remember, the volume bar on the far right only represents the first 15 minutes. As of now it has traded over 3 million shares.

My price target on this stock remains at about $.10. The weekend’s blog suggesting you buy the stock on the 61.8% retracement at $.06 is looking right on for the moment.

If the company can expand this program beyond Verizon’s needs for New Jersey, my price target could go up considerably. However, for the time being, I am very happy with nearly a triple for OTC Journal members over the last few months in the $.10 range.

Consider this a profit alert if the stock gets there. If it doesn’t, we will look at the next 61.8% retracement.

Comments and questions are welcome.

For those of you who read the last BLOG on the stock I am now affectionately referring to as the “Hawk”, you will recall it was entitled “Strong Buy on Hawk, But Not Here.”

The last BLOG was posted on December 21st, and the stock was streaking at the time after the news of the cell tower deal with Verizon Wireless. In that BLOG, I suggested a little patience was in order, and there would be a little less risky time to buy the stock down the road. On that day the stock made a high of $.097, darn near getting to my $.10 price target. For those who picked this one up in the $.035 to $.05 range, you had a chance to lock in a very nice pretty short term profit.

Today, there is only good news. The first good news is that based on the strong technical move in the stock, I believe the next mega surge in this one could take into the $.12 range.

The second good news is as follows- for those who were patient and heeded my advise, now is this time to pick up this stock.

Here’s the chart:

While it might be a little tough to read, the stock has now arrived at a nearly perfect 61.8% retracement of the big move. The 61.8% retracement level is $.0603- about where we are right now. It’s a little higher than my suggested entry level of about $.055 on December 21st, but it’s because the stock went a little higher than I thought it would.

So, if you like this stock, and believe the company is on track to continue to deliver positive corporate developments, now is the time to accumulate NIHK. You can be a seller the next time it makes a big, streaky run.

Here’s another positive- raise your SSL (suggested stop loss) to $.05 from $.03. If the stock cracks much lower than it is now, everyone will start selling.

Comments and questions are welcome.

NIHK has had a breathtaking week. We started at just under $.04 and made it over $.08 this morning in the early going. It’s just a couple of cents below my target price of $.10- a triple in the last couple of months.

The company started the week by announcing a deal with Verizon Wireless to install hundreds of their remote control switches on the back up diesel generators at the cell towers in New Jersey.

This morning, the company announced ‘06 revenues will be 70% higher than ‘05- welcome news to investors.

What to do- here’s my advise. If you bought it right and you think you are a pretty good trader, go ahead and sell it even though there may be more upside in the stock.

This is simply a technical thought. I believe there is a lot more upside in the company in Q1 of ‘07. More breakthroughs order wise could be in the pipeline.

If you are a buyer, which you should be because this is not over, here’s a chart which gives us our lower risk target entry level:

Note the 61.8% retracement I am so fond of brings us down to about $.055. That’s the level I believe you should accumulate the stock. You want to be a seller on days like today.

The stock is now making a serious of higher highs, which is very bullish. The next higher should be even higher than today’s $.083. If you want to make money on surging days like today, you have to buy it right.

Comments and questions are welcome.

I had a lot of optimism about NIHK in the early going, but my optimism has been replaced with a muted feeling that this company’s time is not quite here- yet.

The company has a very unique wireless remote power supply on/off system. It uses the same technology used by pagers.

Back in January when I first looked at the company there were a number of factors which could have led to a winner. They had a huge contract with a Texas based utility they were hopeful of landing. It was awarded to a competitor. They signed a distribution deal with Verizon Wireless- nothing has come of yet it.

NIHK points out the importance of stop losses in the microcap world. My published SSL (suggest stop loss) on the stock was $.09. I pointed out in the last BLOG entry when it traded below the stop loss level, and suggested traders get out.

Now, NIHK is trading at $.06 with no signs of life. Concrete sales from the Verizon relationship is the problem. When and if they materialize the stock will be easy money. However, as we are entering the quiet summer months, I don’t believe anything big will happen until the Fall.

My guess- the stock will probably end up making a round trip back to $.04 where it will be easy money for a rebound in the Fall.

Comments and questions are welcome.

When I wrote my edition on setting your stops against what could be a very difficult market through the summer, I set the stop loss on NIHK at $.09. The stock doesn’t look like it wants to collapse below that level, but nevertheless if you want to protect your principle, you should consider selling.

Here’s a chart:

Technically, I would like to have seen this stock hold the $.11 mark. That represents the 61.8% retracement level from the move up which began in early February.

A wise man once said ideas are plentiful, capital is scarce. Setting stop losses is tricky business. There are a million different theories on how to do it, and it is up to each individual. I set mine from a technical perspective. If an uptrend has changed to a downtrend, I sell and take my lumps. Others may choose to use a percentage. If you like the percentage method, I believe the percentage stop loss should be higher with a riskier stock.

Nevertheless, $.09 seemed like a reasonable level to me. It gave us a 20% cushion against the 61.8% retracement level. However, if you are a long term investor, and want to hang around in this one until sales start materializing from the Verizon relationship, please do so. On the plus side, the stock has been coming down on relatively light volume, so a news related volume surge should put this one right back to a reasonable level.