For those of you who may have missed it, GEPT was out with some news early in the week. While the market yawned in this continuing lackluster environment, the news may portend some other exciting new avenues of business to come in the future.
It seems a major So California police agency has decided to equip 25 of its patrol cars with GEPT’s video surveillance technology. Video and video storage is becoming a bigger part of chronicling law enforcement activity.
What the press release doesn’t say: due to some unique features of the system, GEPT won the contract over some pretty stiff competition- much larger names were in the mix. Due to disclosure issues, I can’t say who they were. GEPT is growing and will continue to grow. To be in the sweet spot of homeland security, they need to complete the acquisition of Astrophysics – this will put them squarely in the middle of the fray for efficient airport and cargo security systems. While the major US airports are fairly secure at this time, cargo coming through our ports is problematic and represents a billion dollar plus market.
The chart is foming a neutral wedge- the lows are getting higher and the highs are getting lower. The longer it takes for the stock to grind out to the end of the wedge, the more violent the break to the up or downside will be when volume returns to the stock.
I believe this stock will continue to trade sideways on low volume until capital begins to flow back into the homeland security/defense sector. Once it does, this stock will be poised to move dramatically.
This is definitely one to accumulate once the energy rush abates.
As always, comments and questions are welcome.
GEPT seems to have broken out above your wedge, and for the past few days, stablized above $3.00. What do you see now?
Editor: Quite right. The stock is behaving quite nicely, albeit on low volume. I believe a major volume surge could take the stock much higher. A major corporate event would be just what the doctor ordered right now. I don’t see it as a sell- If you have a six month window in time I believe the stock could be much higher. The whole homeland security/defense sector is in the toilet right now. The was has caused US Military spending to range far from normal. The 2006 budget, which becomes available in October, should put a charge back in the sector in August/September.
OK, a lot has been happening and today’s pre-opening, well just unbelievable. I look forward to oyur comments
Editor: I would take some or all of my profits right now.
What is happening today with pre-market trades over $6????
Editor: Looks to me like a short squeeze- I would sell some or all.
I am somewhat surprised to see you bail so fast, given the “major corporate event” of a new product and then the publicity on Cramer last night, all on the heels of London. Did you recommend this stock in the 4′s to make one or two points? Seems not worth the risks.
Editor: if you read the weekend edition, you would note I recommended the stock four times since June 1 in the $2.75 to $3.25 range. I think it is going to $10. I think it is going to $4.5 to $5 first. I could be wrong, but if you look at the stock’s history, it has made a number of short term dramatic spikes in the past.
Will someone just pinch me! I dont miss Jim Cramer’s Mad Money. Somehow, I managed to blink and missed this nice run up. Sniff sniff. I guess I never expected to hear GEPT mentioned one such a popular program. Oh well, I guess I will have to wait for a pull back to join this party. I suspect that wont happen too soon as it looks like GEPT is in a sweet spot with a sweeter product line.
Editor: If history repeats itself, the pullback won’t take that long to happen. However, the stock is trading more volume than it ever has- therefore it might hold up a little longer. I still would not buy it now.