Class, we are in session again. Trading 102 this time. As a reminder- what do we do when stocks we like are trading up on high volume, spiky surges? We lighten up. We sell part or all of them (see NIHK).
And, what do we do when stocks we like are trading listlessly, on pullbacks, and no one wants them or cares anymore? We accumulate.
Tongue in cheek aside, all the traders who were previously infatuated with EFSF as it had its two month run from $.18 to $.50 are no longer paying attention. Why? because the stock has been quiet of late and dropping on light volume in small increments. It has been a lackluster market environment as the soothsayers on Wall Street try to figure out why last week’s jobs report was so great against a backdrop of the foreclosure epidemic. If you believe these guys, you would think the lousy 1 million at risk mortgages are going to bring the economy to its knees. $75 oil couldn’t do it- so why should a minuscule percentage of high risk loans do it? Please.
If you like EFSF as I do, you have to pay attention now- Why? because no on else is paying attention now, and the stock has retracted to a very favorable entry level.
Without further adieu, here is today’s chart:
Here’s what jumps off the chart to me. Look at the volume dry up in the stock. As the stock drops listlessly, traders lose interest.
Also, look at the perfect 61.8% retracement as measured from the $.25 level- it’s first stop north of the original $.18 entry level. Anybody pick up CPNE last week at $1.65 when I called the prefect long term 61.8% retracement? It closed at $2.04 today.
Numbers should improve dramatically for the remainder of this year. This company has a number of home run hits in the line up. Cinnergen sales are now picking up daily, and several other products are nearing commercial introduction.
Of note- my SSL on the stock is $.36. It’s just a suggested level, and a level where it is time to re evaluate. SSL revised to $.30, where we can re evaluate again if we ever get there.
In light of the low volume relatively speaking, I believe in this case it is more of a buy than a need to protect your principal.
The company has been quiet of late, but anyone who follows this story knows quiet doesn’t last long with EFSF.
Accumulate while no one is watching. You can be a seller when they’re all piling in and the stock is going up because it is going up. (Again, see NIHK).
Comments and questions are welcome.
Calpine’s management knows what they are doing. You were correct in surmising the change in persona, I believe. Specifically, they wanted that stock price to go down. It benefited them and will continue to benefit them in the long run given their stock buyback program. Additionally, the company is behaving like a “big boy” in terms of guidance. They are trying to show the current investor base and future institutions that they have what it takes to move to another exchange. Regarding your calls, you obviously have what it takes to be in your leadership position in terms of making prudent calls. Thanks. Question: Was the previous price, north of 3 bucks warranted then with what was already know about earnings (not including potential)? Thanks again.
Lewis
Editor: I believe, based on any earnings metric you can come up with, that the stock is worth $4. Go back to old fashioned PE ratios. The dinosaur S&P 500 companies trade at a PE of about 16 with a 9% growth rate. If CPNE delivers $.10 or more in EPS this quarter, that’s annual EPS of $.40- at a PE of 10 you would have a $4 stock. What holds this one back is the history of where the came from as far as stock supply goes, and the real value proposition to their customer base for their service.
Here’s a question for you- If you have a CPNE question, why did you put it in the EFSF Blog?
aren’t you a little bit bias since their paying for your coverage?
Editor: Absolutely. I’m very bias until I don’t like what they are doing. However, nearly everything the company paid me is in restricted shares that aren’t eligible to be free trading until next January. If it’s worth a lot, I’ll make a lot of money. I’m doing very well with NIHK right now, and I suggest owning it from $.06 to $.09. It’s $.20 now and I’m suggesting a sell. I started covering this one in January at $.18- you’re either making money or not- in this one you should be now if you acted early.
Keep us informed you really are very good at your picks.The Dupont news will put this Co on the map. The upside will be unlimited when they want the OraPyhte product. It would mean nothing to Dupont to buy EFSF. I think you will be a very happy shareholder in Jan when your shares are live. Lets see a million shares with a stock price at $3.00-5.00. I would say you will be very happy.Good luck to you and keep up the good work.
Editor:$1 would be a dream- $3 to $5 would be one of the best scores of a lifetime. This is a small company, and it is the stock market. Here’s what I know for sure- if you don’t own it, it doesn’t matter what it does.
I realize you have an interest in the companies you profile.It is amazing how you operate with as much trasparency as you do.
Again an outstanding site!!!!!
Editor: It’s the only way to do it. Tell all your friends, and thanks. Try to remember this when we have a few losers.
I’m sorry. Not only did I post under EFSF, I showed my previous pain by calling Commerce Planet “Calpine”. I guess I’m not as smart as I thought!
Lewis
Editor: Most importantly- you are asking the questions. Thanks for the input. You are probably asking some questions others want the answer to.
so are you saying that this stock doesnt have a chance to go to a dollar let alone 3$-5? I think it does and it will. We are talking about 2 blockbuster products that havent even been sold yet. Once the revenues start building and it goes cash flow positive a profit will be made. They have a very low burn rate. Stocks that are profitable go up well past a dollar.You have seen what had happened to CPNE and a few others. What do you think the price will go up to if the hit their numbers that are being predicted?
Editor: I’m not saying that at all. I’m just saying if it went to $1, I would be very happy. Anything is possible- $3 would be nearly a $1/2 billion market cap.
What’s up with EFSF? Will they come out with news soon? I sold half of my position in NIHK and put it into EFSF hoping for a tandem relationship between the two. Was this wrong or could they still be “tag team” partners?
Editor: What was wrong with that move?- NIHK is dropping steadily, which always happens when people buy a stock because it is going up. EFSF is stable. It has already corrected. Now, you just have some patience. I don’t know when they will deliver news, but there are certainly a lot of possibilities for events.
Is Cinnergen on “The Price is Right” only the beginning of news to come?
Editor: I believe so, but I don’t have a crystal ball. I’m going to be watching the Price is Right for the first time in my life. When the heck is it on?
Sir – what is your assessment of the slow drift down we’re experiencing? It’s far from tanking, and volume is miniscule. However, a half a cent day still adds up. If you had to guess, would you envision a retest of .30 or a big piece of news more likely first? Thanks in advance.
Editor: I can’t say for sure. I know the company had great news flow for a couple of months, and of late it has been a bit thin. These things seem to come in waves, and a wave is due to head for shore. However, it could dribble down to $.30. The bigger concern in my view- oil prices and a big drop in the market. The larger caps are doing great, and the micros should follow soon, so if I had to guess I would say $.40 will be back before $.30, but it’s just a guess.
I bet you wished you sold your million shares at .50. This stock has turned into a real dog. Does this stock have any chance of ever going back over .50?
Editor: If you don’t like it anymore, sell it and get out. This, of course, would be the typical short sighted investor mentality. I bet you believe it is a good company if a stock is going up, and it’s a “real dog” if it’s pulled back and trading quietly. If nothing else, I would hope people are learning a little bit about how to make money in these stocks. If you like the company, you buy them when they are cheap and quiet, and sell them when Lewis here thinks it a “good company” again because the stock is going up and trading volume. That’s how you really make money.
If you just don’t like the company, don’t buy the stock. OTC Journal subscribers who bought this one at $.20 back in January when I first wrote it up love this one.
And- as far as 1 million shares goes- I can’t sell them until well into next year because they are restricted- but you probably didn’t read that far. Perhaps it will work in my favor, perhaps it won’t. We’ll see.
Yes- it has a chance of going up over $.50- which is probably when you will buy it.
I agree with you 100% on your buying stocks advise. I wish i did that with my other investments. LOL! I have been watching this stock for quite awhile and i just picked some shares up this week. It seems like it has finally bottomed out.
Editor: I don’t know for sure if it has bottomed out, but I do know if you like this story, now is the time to accumulate while no one is watching and the stock is cheap. It may drop a few more cents if nothing comes out, but you are in at a reasonably low risk entry level.
I just want to write to thank you for the education you are giving me. I jumped in on CPNE a couple of years ago when it was rising at over a dollar. Then it fell to aprox. 0.17. To say the least I was worried. But I kept reading and learned. I brought more and held a position at 0.77. Needless to say I am very happy now. I have brought into several more of your positions now, on the retractment. If I were to sell all my stock that you recommended and I brought now I still have a three bagger because of CPNE. There have been some that I have given up on and dumped but what I like is that with the micro’s it is just a small investment and the risk can actually be low. When you hit one that is good it can make up for all the bad ones. Also I read what you write about the company and go to their site to read more. You have to like the company and the idea. I expect to make more money on some of the stocks. Though none will probally make me rich it will provide some income at various points which I like for having to do nothing except putting some money into a company.
PS. I brought EFSF on the retractment as you said at 0.39 adding in the commision and am happy with how things are going.
Editor: Glad you have done well with CPNE, but what a disappointment. The stock is just a mess, and perhaps it is a buy as well. If you like EFSF, now is definately the time to be accumulating. They are due to have something good happen. Tell all your friends about the OTC Journal.
So tell us how much of your own money have you put into this stock? Also why not. You have no inside info anymore you havent even a clue to which way this stock is heading. Its time for you to put up or stop the pumping.Get the Co to give some kind of update.You said it would bust through .50 well it cant even get above .38. so if you think its a great buy here go ahead buy some.
Editor: No- I said it was a great buy on the 10th at $.35- Now that’s it’s about to pass through $.40, it’s not as easy to buy. Clearly, you didn’t buy it when I first suggesting it at $.20 in January. If you had, you wouldn’t be whining now. You decide if you like it. If you do, then buy it, but try to buy it smart. These things always give you good entry levels. If you don’t like it, don’t buy it. Find something else you like, either in the OTC Journal or somewhere else.
Nice to see E-Food on the move again.
In todays news release, there is no mention of OraPhyte as one of there products. Also they report expected ballance sheet improvement soon.
Obviously they have sold the product, not just the rights. But I guess they just coudn’t affofd to run with.
Your thoughts please
Nigel
Editor: As far as I know they have not sold either the product or the rights. Dupont is evaluating the product, with an eye towards making a deal to market Oraphyte. What form it would take, I don’t know, or even if it will happen. I know the company has a high level of confidence in the effectiveness of the product.
I just wanted to ask Lewis a question. How do you feel today after those comments you made yesterday about efsf? DUH
Editor: Touche.
I read this on a forum and i think it should be posted. im NOT taking credit for this
“Where’s Thailand research?
Where’s Oraphyte from Dow?
What has happened to that miracle cold cure?
What has happened to the mold cure?
Why did the Company fire their first PR Firm?
What is it costing for this new PR Firm?
Cinnergen at 10 times recent numbers still make this an overpriced stock.
Price is Right is romantic but if you want to sell you need continued public exposure. Is there any now or coming?
Where is the counter to that skin cream, I think it is “proactive”? We’ve been told some superstar is going to hawk our product. That was almost a year ago? Then its within 60 days? What’s the deal here?
This is an issue of credibility. If there are problems with whatever product then have the ethical fortitude to tell us. If you keep negative news under wraps how can we trust your “positive” news?�”
Editor: This person is right- the stock is overvalued. However, this strikes me as a stock that could stay overvalued and get more overvalued over time. Technically, it looks great. However, nothing wrong with hearing both sides of the story.
Matt to bad you sold and took a loss. So we got our update but you the editor still didnt answer why you havent bought any shares with you own money.
Editor:If you read my disclaimer, you will see I already own 1 million shares in return for letting all my subscribers know about this company. Those shares are not eligible to be free trading until 2008, but I think that’s enough. I have a big stake. However, if by the Fall this company is not generating serious revenues and moving forward with other products in addition to Cinnergen, I will probably drop it or suggest getting out. Right now, it looks like they will.