CPNE- If You’ve Been Waiting, Act Now

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CPNE collapsed today for no apparent reason. At first I thought it might be related to today’s annual shareholder meeting, but then I heard it was simply an election of board members and there were no attendees.

I know there were rumors floating around that the company was going to announce some preliminary Q3 numbers- that didn’t happen at the AGM.

My suspicions are someone was either hoping some preliminary numbers would get the stock charging up, or someone just decided to sell a bunch on a low volume day. It never ceases to amaze me how short sighted some people can be.

At any rate, today the stock traded back to a perfect 61.8% retracement of the most recent big move. If you have been looking for a favorable entry point, I suggest you pounce right now. Here’s the chart:

cpne11.gif

The stock ran from $1.05 pretty much straight to $1.80 starting in early September. This is the first significant correction since my last BLOG posted entry level of $1.20.

As you can see from the chart, the $1.344 level is a perfect 61.8% retracement, and the level you should pounce on the stock.

The volume today is moderate, which leads me to believe this is not a direction change, just a pullback on a light volume day. It was only 100,000 shares in about a 15 minute period that caused the stock to swoon. Since then, the volume has picked up considerably as other bargain hunters are jumping in.

If you have been looking to establish a position or add to one, now is the time to do so. Make $1.20 your SSL.

Comments and questions are welcome.

25 thoughts on “CPNE- If You’ve Been Waiting, Act Now”

  2. Did you happen to notice what happened to DSCN after the news? This speaks well of their contract with CPNE. Best wishes.

    Editor: I believe you mean DSEN. Nice rebound in the stock, albeit on light volume. The stock needs a much better following. However, we did well with that one the first time around. Could be a good candidate for another trade. I was the one that introduced the two companies.

  3. Its looking like another big drop on low volume. I wouldn’t mind picking up some more shares but I would like to do it closer to earnings reporting. Do you know when this will be?

    Editor: In the June quarter they announced earnings on Aug 3rd. I don’t know of any reason why they wouldn’t be able to announce in about the same time frame as last quarter. I would guess first week of November. 

  4. So, with the recent near 60 cent fall in the last ten days does this mean that 3rd Quarter results might not be as good as last quarters? Should I sell? Is this stock going to be like last years roller coaster ride?

    Editor: My channel checks lead me to believe the September quarter’s top line will be at least equal to the June quarter’s top line. If that is the case, the company should report at least $2 million in earnings, or somewhere around $.05 per share. However, based on their results over the last several quarters and a couple of mid quarter press releases, it is reasonable to assume the top line will grow. The only negative- seasonally it is a slower time of year. My guess is that it is going to be another very strong quarter. However, the way the stock is behaving is a little bit of a concern. I don’t like the fact that it made a lower low this week than last week. Looking at the bigger picture and where the stock has come from this year, it is not such a big deal to see it go through a corrective phase.

  5. Do you have any idea on why the stock just dropped to $1.25. Was there reason or just someone trying to get rid of the stock. It seems as though many people are pulling their money out of microcaps into other areas of the market.
    I read your website often thanks for the great info.

    Editor: Over the last couple of weeks I believe there has simply been some profit taking in the stock. After all, it has come a long way this year. Seeing it make a lower low that last week is a little troubling, but I believe September quarterly earnings will get it going again. 

  6. Looks like we are losing profit at a pretty good clip. Are you still looking for this stock to reach near the $2 level?

    Editor: In short, yes. I am looking for Q3 earnings to put a charge back into the stock. With as far as it has come this year, a little corrective or consolidating action is not unexpected.  

  7. Dear Editor,

    Do you have an explanation for CNPE. I’ve seen or hear nothing. Something to do with Q3 numbers? Because I live in the Netherlands I want to be sure. Thanks.

    Remco Lunding

    Editor: You can never be “sure” unless you have insider information, which I don’t. And, even if you are sure the numbers are going to be great, it is no guarantee the stock is going to behave as hoped for. However, my channel checks lead me to believe CPNE will report at least $2 million in profits in Q3 (about $.05 per share) – they should achieve this if there is no top line growth. If you look at where the stock has come from this year, it’s not too unexpected for it to go through a corrective phase.  However, I have to admit I don’t like the action of late. I don’t like the way it made a lower low this week than last week.

  8. In light of the last few days and this stock falling, do you still have hopes of $2?

    Editor: The way the stock has behaved the last two weeks has been a little troubling. However, if you look at the bigger picture of where it has come from, it makes sense the stock should cool off for a bit. Nevertheless, I believe earnings will come it very strong in Q3, and $2 remains my target for this year. 

  9. AAAGH! What is happening here? Big volume today and its going down. When is enough, enough?

    Editor: This is very interesting. The move to $1 is a perfect 61.8% retracement of the move that started at $.50 when the company announced Q3 earnings. If the stock stabilizes here, we are fine. If the stocks behaves much worse, technically it will be very negative. 

  10. Are people just following the leader here? What is going on with the 70 cent loss in the last ten days. At this rate this stock will be back down to 20 cents in ten more days of trading. I believe this is a good strong company and willing to hold but at some point I will have to cut my losses

    Editor: Technically this move is very interesting. $1 is a nearly perfect 61.8% retracement of the move which started from $.50 when the company announced Q3 earnings in early August. Only 2 1/2 months ago. If it has any further downside action, it will be very negative. However, if $1 holds, we will look back at that level as a heaven sent buying opportunity. 

  13. Who’s the big seller? Duchess again? Why would they sell so agressively? I guess sometimes it’s best to take the hit and get them out of the stock, but i would love to know how is doing the trading. This isn’t retail, this is a financier or fund of some kind.

    Editor: My thoughts were covered comprehensively in the weekend edition:

    http://www.otcjournal.com/archive/listserv/20061021-1.html 

  14. I view this as a gift for all long term holders. Bought 5,000 more today. As for reasons? My personal opinion is that Efund & Duchess Capitol own over 29 percent of the float. Since CPNE paid these guys off, they have no reason to hang in. Efund is selling chunks on a monthly basis. So if they sell on a low volume day, look out. As more investors discover this gem, the float will go into stronger hands. Plus more news today with a comment saying revs are better than the 3rd qtr.

    By the way, CPNE does have a thread on the Raging Bull.

    To All
    Hang in there
    Skip

    Editor: I believe it is possible Efund is the culprit. Efund really did nothing but have a shell for this deal three years ago, and they own a huge position. The company is a bit at odds with the manager of eFund, and recently got him to resign from the board.

    My thoughts on the situation in the weekend edition:

    http://www.otcjournal.com/archive/listserv/20061021-1.html 

  15. In your last edition you stated that all debt was paid off in quarter 2 , that is not correct . They paid the remaining 1.2 million in the third quarter so what ever the net profit is it still has to allow for this final payoff . Also the new oustanding shares amount is about 47.3 million as opposed to the 45.4 million that was listed in quarter 2 . In my opinion they increased the shares for some acquasitions and maybe to completely clean up debt. However I still believe that 2 million in profit ,even after debt repayment is on track . Now next quarter with similar numbers would put us in the 3 million dollar profit area ,that equals .27c per share annually , hence a $3.00 stock at 12 times earnings .

    Sincerely
    Andy

    Editor: Thank you for your contribution Andy. However, you sort of correct but not quite getting it. Yes, the debt was paid off in Q3, but the one time fee was not paid in Q3- it was in Q2, and was about $1 million. Paying off debt is not an expense to earnings. Fees and interest are.

    Please note the interest expense of $1,025,573 on only $1.4 million in debt during Q2. Andy, they aren’t paying 100% interest every 3 months. The one time expense was taken Q2, and the debt was paid off in full shortly thereafter. Without that one time special payment for paying off the debt early, the earnings would have been about $1 million more. We’ll see if they make more than $2 million net in the quarter.

  16. I don’t beleive for a second that Mike Hill doesn’t know who is hammering the stock. Maybe DUCHESS?????????????? Even though they won’t confess to it in a million years.

    Editor: Thank you for your comment. So, do you see this as a buying opportunity or a problem? 

  17. One thing I always suspect when a micro-cap stock in growth path starts acting like CPNE now is if the Managemenet has some new plans for growth in stocks dilution which I would be the last to know through Yahoo’s Finance site!

    Editor: You would find it out in the SEC filings. Other than adopt and ESOP for the employees, the company has done nothing to result in major dilution recently. You can’t depend on Yahoo! for all the important 411- you must learn to read the SEC filings. 

  18. Is it public information when Commerce Planet will release its financials or do we just wait for them to post it? Not sure?

    Editor: In the past they have pre announced the date they will release their numbers. My guess is they will this time as  well. As far as I am concerned, it can’t happen fast enough. 

  19. quote “As far as I am concerned, it can’t happen fast enough. ” unquote
    you took the words right outta my mouth….

    Editor: To some it may not seem like it sometimes, but we are all in this together. We win or lose together. 

  20. So what are the chances that nothing will happen once Q3 is released. Since there has been nothing but good news lately and the stock is still going down. What makes anyone think that it will go up on more good news? Will this be the release that breaks this selling trend or stagnicity

    Editor: There is no guarantee the stock will go up on Q3 numbers. There’s never any assurance any stock will ever go up in the stock market on any news. However, making money in the stock market is all about identifying situations you believe someone will be willing to pay more than you paid somewhere down the road. If CPNE delivers another quarter with growth in sales and earnings, that will be three in a row, and investors should become more convinced the company is very much for real. Let’s say they deliver $.05 per share for the quarter. That’s $.20 in annual earnings. The growth rate will be at least 40% annually. In a totally anemic and terrible market environment, this stock would deserve to trade at a minimum of 10 times earnings- $2- you could easily argue it deserves a 20 mulitple- $4- More investors have discovered this stock than ever before. In short- you have to have faith the stock will eventually trade more efficiently at some point in the future. If the company keeps delivering profits, your odds go up. I think it is more likely someone will take a run at buying this company out if they keep delivering the numbers. 

  21. please. what is the anticipated date for the 3Q release ? you might have laready mentioned it but i dont have all that much time to go online to reserarch it myself. just taking a short cut. thanks in advance.

    Editor: The June numbers came out on August 3rd- therefore, I am hoping for the first week of November- The company will probably pre announce the release date, and I will cover it for you. It should be within the next two weeks. 

  22. More good news today! Lets hope this Q3 rocks everyone’s world. I am betting my chips on this one. All in on CPNE

    Editor: I believe numbers will be out between now and next Tuesday morning. If the stock responds anything like it has after the last two quarterly reports, it should do very well. 

  23. Dear editor,

    I follow one the strategies of O’neal. It’s also what you already mentioned. Three spectacular quarters in a row is a good moment to step in. As long as the money come in there is no reason to sell. I agree that it could easily pass the $2 before 2007. If q3 is good maybe it will pass the $2,50. Thanks for publishing. I like your comments.
    Good weekend.

    Kind regards

    Remco Lunding

    Editor: Definately a CANSLIM stock. Not behaving very well today. Wonder why? Perhaps the discrepancy between the 10Q and the press release is confusing investors. 

  24. It seems as though Commerce Planet is waiting to the very last minute to release their results. I think that means its probably going to be very good considering it has been very quite. Their probably going to slap a whopper of a quarter, I hope! you have to think positive.

    Editor: It is a whopper of a quarter, but the stock is going nowhere- it must be the discrepancy in the numbers between the 10Q and the press release that has the market confused. If that’s not it, I just don’t know what’s going on here- the stock should be rocking. 

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