CPNE- Never Too Late To Be Right

They say timing is everything. My timing was off, but not by much on this one. CPNE busted through my $2 price target today. I thought it would get there in 2006- better late than never. 30 days is nothing in the whole scheme of things.

Like PNWIF, I would not be an aggressive seller of this one. The stock is behaving as if something very positive is going to come out of the company, and I would hang in there to find out what it is.

Here’s your chart:

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This is a weekly chart. As you can see, the previous all time high was set in February of 2005 at $1.945. As I write this today, this stock is trading at $2.07- a clear breakout.

Fundamentally, the stock is worth $4, hands down, if the company can continue delivering the numbers and growth it has delivered in the past 3 quarters.

I have a high level of confidence CPNE will deliver good numbers in Q4 ’06 and Q5 ’07. I don’t have much visibility beyond that.

If you feel you have to sell some, don’t sell too much. This could be just the beginning.

Comments and questions and self congratulations from believers are welcome.

eFoodsafety: Retraces to First Entry Level

After a couple powerhouse weeks, EFSF is finally taking a well deserved breather, giving investors an opportunity to either load up or reload on this idea.

The thesis remains the same. My current short term price target is $.40, increased when we so rapidly eclipsed the original $.30 price target.

Here is the chart showing you the important retracement levels:

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The higher 38.2% retracement level comes in at about $.285. This is the first level you should be willing to begin accumulating.

If $.285 falls, then look to $.245 as the perfect level to really get aggressive if you like this idea.

I believe there is lots more to come on the Cinnergen front, the Pur Effect infomercial, and the other products that are all turning commercially viable right now.

Comments and questions are welcome.

PhotoChannel Networks: Profit Alert

PNWIF traded to my short term target price today of $4, which is a 122% return from about $1.80 since introducing the company back in September 23rd. All the way around, a huge victory for OTC Journal subscribers.

Very exciting.

So, is it time to take all your profits?- In a word, NO!!!- We could be just at the beginning of a major long term growth spurt in the company. While their revenue numbers will not blow anyone’s mind, their margins are going to be huge.

Here’s another issue to think about- Now that the stock has hit the $4 level, the company could be in a position to upgrade to a NASDAQ small cap listing if it can hold this price for 30 days and meets the other criteria. Since I expect the company to be profitable and it has no debt, it seems likely a NASDAQ listing could be in the cards.

If you have to sell some, make it a partial sale. Here’s the chart since the OTC Journal launched coverage in ’06:

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It’s simple- it doesn’t get much better than that. This one is working out great, and I believe we can ride this horse quite a bit longer.

Comments, questions, and self congratulation to those who own this one are welcome.

Bad Toys X-Dividend Date Finally In the Books

Well, after one whole year the day has finally arrived. Bad Toys is really finally going to trade x-Southland dividend on February 2nd.

Here’s what this means to shareholders: If you own BTYH at the close of market on Thursday, February 1st, you will receive a dividend of just under one share of Southland for every share of BTYH you own when the market opens on February 2nd. Therefore, let’s say you own 5,000 shares of BTYH on February 1st. You will receive, in the mail, a certificate for about 5,000 shares of Southland Health Services, Inc.

The stock certificate you receive in Southland will be in free trading shares. Here’s what I don’t know- when Southland will open for trading, at what price, and on what exchange.

Then, if you so choose, you have the option of selling your shares of BTYH in the open market anytime after February 2nd. If you choose to do so, you will still receive your dividend in Southland shares.

MarketByte LLC, the publisher of the OTC Journal, currently owns 150,000 shares of BTYH which are restricted, but eligible to be free trading under Rule 144. I will not be selling any of those shares prior to February 2nd because I want the Southland dividend for all of them. However, I might sell some starting February 2nd if BTYH trades at a reasonable level.

I would expect BTYH to open considerably lower on February 2nd. After all, the company is dividending out 75% of its value to shareholders, so in theory when it trades x-dividend it should open 75% lower.

I will publish a comprehensive update early next week so everyone has a couple of days to make up their mind on how they want to proceed.

In short, if you are going to hold your BTYH for the dividend, you are taking the leap of faith that Southland can open and trade at a much higher level on a stand alone basis. On paper, it should be able to happen.

If you are concerned about the loss of value in the BTYH shares, and aren’t willing to be on the future value of Southland on a stand alone basis, sell your shares of BTYH on or before February 1st. It will be worth a lot less on February 2nd.

I don’t know how long it will take for Southland to open and trade on its own. However, I personally believe it will take 2 months at the minimum, and probably longer.

Here’s the current chart:

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BTYH has been in much better shape since this never ending regulatory process finally moved in a positive direction with effective registration of Southland and now the NASDAQ finally allowing for the x-dividend date.

However, the stock has not headed to its previously lofty level of $2.50. Over the past year the stock drifted down to $.50 as the company slowly ground through the SEC.

One year later we have some progress, but the stock is now only around $1 despite the $50 million plus in annual revs and consistent quarterly profits.

The market is simply telling the company their spin out story is less believable after the year’s wait. Nevertheless, the story is the same as it was a year ago.

I believe this is one of the most interesting special situations I have ever seen, and it is going to be very exciting to watch it play out. On paper, it all makes sense. If CEO Lunan pulls this off, you will wish you owned a lot more in the $1 range.

Titan Global: The Pause That Refreshes

Titan is trading a little weaker post earnings report today, and this is not unusual behavior for a stock that ran up out in front of the event.

As I stated in last night’s edition, I wasn’t sure whether the stock would keep powering up, or pullback a little on the release. Despite being cash flow positive to the tune of perhaps as high at $.05 per share, the company did report a loss, and investors don’t know how to drill down into the data and get a feel for the true financial health of the company.

I believe next quarter is going to show marked improvement as some of the non-cash baggage in this release is going away.

I still believe this one has a legitimate shot at $3 to $4. Here’s the current chart:

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If the stock is going to continue correcting, $1.09 is the perfect level to buy. Note the DiNapoli 3×3 moving average and the 61.8% retracement nearly coincide at that level.

Any streaking stock is entitled to pull back a bit. I suggest setting your stop loss at $1.05, and jumping in with both feet if it pulls back to about $1.10.

In the interim, more news could just turn it around.

Comments and questions are welcome.

The Hawk Soars To Expected Heights

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:

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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.

eFoodSafety – News Keeps Party Going

eFoodSafety, my latest idea in the penny stock arena, was out with early news today, and it bodes well for higher levels for this idea.

For penny stock afficianodos, your first shot at this one was about $.20. Today, it is a $.24 stock and looking to try to go higher.

Since this idea is just in its infancy, a 20% return in the first week is not bad.

Today’s news concerns the effectiveness of their blood sugar regulating product, Cinnergen. I have started taking the product, and will report if it yields any identifiable changes. I could definately stand to lose 10 lbs like everyone else after the holidays.

The company published the findings of the clinical results it had commissioned, and they were outstanding. They now have clinical proof this simple liquid product helps diabetics and non-diabetics process sugar more efficiently.

I strongly recommend you read today’s press release so you can get your own understanding of just how effective this product could be. Here’s a short cut- just click here.

Our major concern here is with sales of the product- so what will this mean? In my view, it means the company will expand its retail distribution network quite rapidly.

Here’s the current chart:

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As you can easily see from the chart, the gap from last week’s huge volume day has not been closed, and sometimes it simply doesn’t happen. This is because the company delivered news of significant progress today, and investors are continuing to buy this one up.

At this point, the gap may never be filled, particularly if the company can deliver more substantive events in the near future.

Look for new retailers to start carrying the product now that they have clinical data to support their claims.

This is just the beginning. Comments and questions are welcome.

PhotoChannel Busting Out All Over

PhotoChannel is trading to a new multi year high, and the highest level the stock has seen since February of 2001 when the dot coms turned into dot bombs.

My price target of $4 stands for the time being, but the stock may have legs beyond that level.

There are a limited number of pure plays in the digital photo finishing space- really only 2- Shutterfly (NASDAQ: SFLY)- last year’s IPO at $15 sporting a market cap of $333 million at about $14 (one point below the IPO price), and Photochannel- (OTC BB: PNWIF).

PNWIF has about 30 million shares I&O on a fully diluted basis, so at the current $3.30 level the market is saying the company is worth just south of $100 million.

PNWIF is a Canadian company, and trades under the symbol PN on the TSX as well. Since they are primarily a Canadian reporting company, their rules for disclosing financials are a little different. In the US they would have had to file the year end (September year end) by the end of December. In Canada, it extends to the end of January.

Year end numbers are due out any day, and within several weeks we should also see the December quarterly numbers, which I believe are going to be quite extraordinary.

Fund managers are embracing PNWIF as a value as compared to SFLY. Many, including myself, believe the PWNIF business model is more compelling than SFLY.

SFLY is in the mail order business. You upload your digital photos to their site, and they process and send you prints in the mail.

PNWIF on the other hand simply provides the online back end interface for stores. Consumers upload their photos, order prints, and pick them up in their local CVS, WalMart, Costco, etc. PNWIF collects about $.02 per print.

PNWIF does not have the burden of customer acquistion or infrastructure costs for photo processing. They simply take the order.

Therefore, when the time comes to compare SFLY to PNWIF, you have to look at the gross profit numbers and the net numbers.

Here’s the current chart going way back just for fun:

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As you can see from the blue line that represents today’s high, PNWIF hasn’t seen this levels since 2001- six years ago.

Who’s says reverse splits are bad? They are great when used for the right reasons.

I believe this stock is now trading up in anticipation of numbers- not the year end through September of 2006- but their fiscal Q1- Oct to Dec of ’06.

The stock will probably continue to trade well up until those numbers come out, then we will see where they are. $4 remains my short term target, but Q1 numbers could result in an adjustment higher.

You should be doing very well in this stock as I first brought it to your attention at $.18 prior to the 10 for 1 reverse- or the equivalent of $1.80. Therefore, we are now up 83%.

Comments and questions are welcome.

Bad Toys X-Dividend Date Announced

Bad Toys is behaving like a well trained hunting dog- making the moves on my commands as events develop. As I pointed out throughout the month, I believed this stock would trade well up until the day it made its short term high- now likely to be January 31st.

If you own BTYH on January 31st after the market closes you will be entitled to a dividend of one share of Southland Health Services for every share of BTYH you own.

If and when Southland opens for trading on its own, your newly acquired shares will be free trading.

CEO Larry Lunan has publicly stated many times he hopes to see the company attain a NASDAQ SC listing, in which case it would have to trade at a minimum of $4. On paper, one could easily make the argument the value is there. The AMEX would be choice 2- with the $3 minimum.

If you own the stock at the close on January 31, expect the stock to open for trading considerably lower on February 1. After all, on paper, the company will be worth 75% less on February 1 as they are giving out 75% of their value to the shareholders.

If you own this stock, and you were just in it for a trade, you must sell your shares of BTYH before January 31- perhaps on that day. You will forfeit the dividend, but probably make a nice trade.

If you hold for the dividend, you are betting you are going to make your making on Southland Health Services once it opens. The SEC has given the company permission to trade on its own, but they don’t have an exchange or an opening price yet.

To be clear- there are no guarantees it will ever happen, and there are no price guarantees when and if it does. Plan on the process taking at least a couple of months if not more.

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Here’s the chart of the behavior of BTYH since investors started to realize they would get through the SEC process. I have been suggesting accumulating the stock up to $1. That level is now eclipsed, so where from here?

If the company can refinance its debt in the next week or two, I believe that would be the catalytic event to catpult them to a senior listing as described above.

You can still buy it at this level, but if you do so, don’t do it just for the pre x-dividend trade. Do it so you can own your shares of Southland, and take your chances there.

Comments and questions are welcome.

eFoodSafety Gaps Open- Use Caution

The first day of coverage of EFSF is starting off with a pretty big bang. The price move up is nice, but the volume is very impressive. The stock will certainly log the biggest volume day it has enjoyed in many months.

Apparently, investors have been looking for an excuse to jump in. Between the OTC Journal presentation and the news on the USDA study coming near its end, the market likes it.

It is time to remind everyone about Gaps. Most of the time, when a stock jumps at the open, the price moves back down and fills the gap. The gap is like a vacuum, and nature doesn’t like a vacuum.

Here’s the chart:

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I’ve circled the gap from last night’s close. Be prepared for the possibility the stock might want to come back and fill that gap before it is ready to move on to higher levels. If you don’t have a full position in this stock, wait for it to come back down a few cents- perhaps to $.19, and then load up.

Typically, once the stock comes back and fills the gap, it moves up. It happens because the market makers are all shorting the stock, and then they need it to go back down. It’s a psychological game- investor buys at the high, market maker shorts it to him, buying dries up and stock moves back down a few cents, investors sells back to market maker at a loss because it is going down. Marketmaker covers his short and pockets a few cents per share.

If you own it at the high of the day, it’s probably going to be fine. This journey is just beginning, and the next stopover is close at hand.

Comments and questions are welcome.

US Energy- Confirms Company is on Track

Yesterday US Energy disclosed its top line number for 2006. While impressive and providing further evidence the company is moving rapidly from an R&D stage to commercial success, the stock is still in the proverbial toilet and showing no signs of being reincarnated yet.

The company announced it concluded 2006 with about $2.5 million in revenues- which means in Q4 the company delivered $1.6 million – just about double what it had achieved in the first nine months of the year, and greater than the combined revenues in its entire history.

This is certainly welcome news, and provides clear evidence the company is on track to deliver the kinds of revenue streams we were discussing in 2006.

In a move that has me scratching my head, the company also announced it intended to change its name back to Hybrid Fuel, from the 2006 change to US Energy Initiatives. Talk about fickle. It might be this kind of confusion that has investors wondering about their ability to understand what it takes to be a public company.

Despite the good news, the stock is showing no signs of life. Here’s the chart going back to the beginning of 2006:

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As you can see, a dismal performance. I know a lot of investors who believe in this company, but I really don’t know anyone who believes in the stock right now.

This thing is so blown out that a decent volume surge should get it going. Sir John Templeton said: “I always made the most money when I bought at the point of maximum pessimism”. Perhaps we have reached that point with USEI when a confirming announcement of that magnitude has no effect on the stock. Perhaps it is a buy.

The company promises extensive updates in the coming weeks. My guess is they are on track for a big 2007.

As I have covered ad nauseum, this stock was the biggest disappointment of 2006- great news and corporate accomplishments- horrendous price performance. The capital structure is abysmal.

Comments and questions are welcome.

Hawk Soars Into Second Order

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:

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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.

Bad Toys Finding a Bid- Storm Clouds Brewing

In case you haven’t noticed, BTYH is finding a bid as we make the corner into 2007. This one was one of the stocks victimized by tax selling as the stock had a bad year, but all the reasons we looked at it in 2006 are finally coming to fruition in 2007.

Just to remind you, BTYH is what I would describe as a “Special Situation” trade. Larry Lunan, CEO of BTYH, is attempting something I have never seen done before. He is attempting to unlock the value the company has in its subsidiary – Southland Health Care- by spinning it out into a separate public company and dividending out shares to shareholders of BTYH.

I have seen subsidiaries spin out in the past, but never when the subsidiary was over 90% of the parent company.

Southland Health Care, on a stand alone basis, generates about $44 million in annual revenues, and delivers about 10% in profits. It has over $6 million in shareholders equity. Southland provides both emergency and non emergency ambulance services in 8 southern states. The company employees about 876 employs, provides 130,000 transports annually, and serves 200 communities.

There are approximately 28 million shares I&O, and if you own BTYH you will be awarded an equal number of shares of Southland.

In theory, if Southland were to trade at 10 times earnings, the stock would be around $1.78. Two times revenues would be more like $3 per share. At any rate, on paper it is certainly worth far more than where BTYH is trading right now- at about $.60 per share.

Last year at this time BTYH ran to about $2.50 when they announced they were going to dividend out the shares of Southland and do the spin off. They even announced a record date in mid January 2006.

To make a very long story short, there were conflicting regs between the NASD and the SEC on the dividend, and BYTH was stopped from doing the dividend until the registration statement for Southland was declared effective by the SEC.

Now, it is nearly exactly one year later. Guess what- the company is literally a few days away from an effective registration for Southland, and BTYH is finding a bid and trading up.

Last year’s theme is coming to fruition this year. There are two potential catalytic pending events for this stock: 1. An effective registration statement on Southland, and/or 2. A refinancing of their debt under more favorable terms.

Here’s the chart:

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I wanted you to see the big picture on this one. This chart shows the stocks rise in the Fall of last year as it peaked around $2.50. It also shows the demise of the stock all throughout 2006 as the company disappointed investors on the timetable for effecting the spin off.

The effective registration is only Step 1. They also have to get the stock open for trading on a senior exchange (i.e. Amex of NASDAQ SC). If they do, the dividend shares will pay off handsomely for those who understand this special situation.

Once Southland is effective, the company should be able to announce a real x-dividend date, and the stock should trade up as demand surfaces from investors who want the shares of Southland. It will probably trade down considerably the first day it trades x-dividend.

I know it’s a little complicated, and certainly interesting. I would describe this as a trick to unlock the value in the stock, but the value is there.

You need to own it now before an x-dividend date is announced if you want to own it at the right price.

Comments and questions are welcome.

Titan Global: The Sleeping Giant

If you believe good numbers eventually get reflected in stock prices, Titan Global could be the best idea of 2007.

TTGL is starting to deliver exactly what they promised, and Q1 numbers are due out in about one week. I strongly recommend you own some of this stock before the numbers hit. Their Q1 will reflect the company’s performance Sept to November of ’06.

Yesterday, just prior to the open, TTGL announced it had complete the afore promised refinancing of its debt with a more traditional and less expensive financier. The refinance will improve the company’s annual cash flow by $3.5 million, and allow TTGL to retire 1.25 million shares and 3.5 million warrants.
We would all do well to remember TTGL believes it can achieve $145 million in revenues in fiscal ’07, up from $109 million in fiscal ’06.

The company also expects to deliver $18.5 million in EBITDA profits. Taking the conservative road, let’s say they deliver $10 million net. TTGL has 48 million shares I&O. This could equate to $.20 per share in earnings- a $2 to $4 stock hands down.

Here’s the current chart:

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What jumps off this chart to me is the 2 month consolidation in the $.90 to $1 range. I first covered this one at $.84, so we are experiencing a little profit over the first two months.

However, based on expected numbers, this stock is still absurdly undervalued, and has a lot of upside.

Just like we saw with CPNE today, after a period of consolidation a break out is due if the company is moving in the right direction. This one is ready to break out with the next volume surge.

You have about one week before Q1 numbers are released, and I strongly recommend establishing a position before the next earnings release. It could be far better than the market realizes.
Comments and questions are welcome.

Strong Buy On Hawk- It’s Here

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:

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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.

The Planet Cranking in ’07

CPNE is treating investors to a late Holiday gift with a great surge in the early going of 2007. The company announced record enrollments in December this morning, and the stock is responding in kind.

CPNE announced it had enrolled over 71,000 new members in the month of December- doubling the November enrollments.

Therefore, we can assume the next two quarters- Q4 of 2006 and Q1 of 2007 will continue to be very strong. Some of the December revenues get booked in January. I don’t think I am going out on a limb to suggest this company is still generating at least $1 million per month in profits, which equates to about $.023 per month, or $.10 per quarter, or $.40 annually. Wow.

The ascending wedge chart has broken to the upside. Here’s a look:

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As you can see, the stock has clearly broken the downtrend line today, bringing the age old target of $2 back into the short term technical picture.

The next threshold would be above $1.80, which would be a new multi year high. Based on corporate performance, the stock certainly deserves to go there.

Of note is the breakout on fairly light volume. The 150 day average volume is over 300,000 shares per day. As I post this BLOG, we are just over 500,000 today. Good, but not breathtaking.

I’m looking for a repeat of CPNE’s winning ways in ’07. Comments and questions are welcome.