It always happens when you least expect. Beaten down and oversold NWWV has decided to rebound for no apparent reason. Someone has come along and decided to start buying this stock, and today NWWV is experiencing the biggest volume day in months.
In light of last week’s revelation that the company has turned to the plus side on the cash flow, and that sign ups and sales are hitting record levels, it is not all that unusual to see someone come for this stock.
I have no idea where this is coming from. As I stated in the year end edition and recent BLOG- while we got our heads handed to us as a result of poor third quarter performance, the next generation of shareholders will probably make a lot of money from these absurdly oversold levels.
As pointe out in the last BLOG entry, if you are looking for a beaten down idea where the company has turned up long before the stock, here’s your idea.
As you can see from the chart, NWWV has traded as much volume today as in any day since mid October, and it’s only 2 hours into the trading day.
If the volume continues, look for higher levels. Comments and questions are welcome.
Probably some market maker buying on the hope others will jump in so they can sell. This one has a ways to go before I will gain interest. What happened to good ole Bob? Plenty of promises from a CEO, but can he deliver. My feeling is that the directors are just bleeding (spending) the cash and are net sellers of stock.
Editor: Perhaps you are right. However, last week’s news was pretty robust on the fundamental side. You are quite correct- this company has a long way to go to prove its worth after last year’s blunders. There hasn’t been liquidity in this stock for many months, so I’m not surprised to see some stock for sale. We’ll see over time.
I jumped in for a piece of this because it was at a low point (I think) and M. Novielli who is a director of Xtreme Co. and NWWV appears to be doing what he said they would do. A 50% revenue growth(for 9 mo.) predicted for the next period is hopefull but also a fairly nice expansion.
Editor: Mike is the one who is largely responsible for getting the company back on track. This “young gun” management team was simply expanding in every direction before they were ready to. He brought in an seasoned CEO, shut down their unprofitable and failed subsidiaries, and got them refocused on their core strengths. They are now very focused on customer retention, which would make the company very successful.
I have a substansial profit after todays trading but dont want to miss any upside. Do you think this stock sees a dollar? Is there anyway to disprove that market maker theory?
Editor: From a technical perspective I don’t see any real reason to sell the stock- it has not spiked like TLPE did when I published a profit alert on that one. From a fundamental perspective I don’t see the urgency to sell- if the company’s performance is really as advertised in recent press releases, this one could go back up. A good strategy might be a partial sale. I’m not too sure about your theory on the market makers. However, this one seems to have finally gotten some legs.
Dear Larry, I think the whole concept of Newave is just great. This is in my opinion an excellent opportunity to create long term shareholder value. A smart move. Kind regards, Dr Ing. RemcoL Ph.D M.Sc, Netherlands
Editor: Anecdotally, I am hearing the company is doing extremely well. Their poor performance through Q3 of ’05 is reflected in the stock, but I don’t believe their turn around has been reflected in the stock price yet.
I’d like to get in on this stock but it is heading south. Do you think that NWWV has about bottomed out and due for a run? Are there fundamentals strong enough to show up on the the investor’s radar to produce volume. Should I be looking for a volume spike coinciding with a stock price increase?
Editor: On the fundamental side, I hear the company is really kicking butt, so I would expect the uptrend to continue assuming market conditions remain favorable- oil prices are the potential problem there. On the technical side, the stock made a pretty nice run off the bottom, and clearly there is some profit taking. Since $.31 has been breached, $.26 would be the ideal entry level at this point. It might not want to trade that low. One strategy- pick up 1/3 of what you want to own here, and the remainder if the $.26 level is reached.
Dear Editor, I’am astonished about the fact that NeWave is progressing so rapidly. NeWave announced record new memberships in January (80% increase over december). I’am a suprised that the OTC-Journal says nothing about NeWave’s progress. Kind regards, Dr. Remco Lunding
Editor: I have blogged it a couple of times, but I haven’t paid much attention as you point out. The reason is simple- I covered the stock for nearly 2 years. It pretty much blew up in the second half of last year, much to my disappointment. I have simply moved on to some other ideas that appear to want to trade better. People want something new. When the stock starts trading better, I will give it some coverage. In the meantime, if you have decided to be a long term shareholder, it’s at least nice to know the company is moving dramatically in the right direction.
NewWave seems to have stalled between the .20-.25 mark. I got into it before the crash. but since I got into it for the long term figured I’d ride it out. Now that it seems to have bottomed out I’ve been thinking of increasing my position in order to re-coup some my paper losses. Where do you think the company will go this year if it can sustain it’s growth rate?
Editor: I won’t be able to suggest where the company could go fundamentally until I see q4 and q1 numbers for ’05-’06. I don’t know exactly what they will be, but I know they will be considerably better than the q3 numbers, which were pathetic and caused the stock to basically crash. I believe you are on the right track. I also believe the best way to buy microcap stocks is to accumulate when no one wants them and they are very quiet. That having been said here’s another thought- the worst predictor of price performance is value. While the stock is a great value down here, I can’t say when it’s going to wake up. Therefore, if you pursue this idea, you have to simply wait until the stock gets hot again. When that will be, I can’t say. Can they sustain their growth rate? That will depend on how they are doing on customer retention, which I have heard has doubled over the last three months.
NWWVcame out with their annual and 4th Q numbers and I’d like to know if staying in at a cost bases of .26 is recommended or will it get back to the thirties? Fundamentals look great and lots of positive news has come out over the last three three months but it was beaten down to .17 earlier this week from the high twenties to low thirties. How soon should we expect it to rebound and get higher?
Editor: Here’s the part I can answer- I believe the numbers will continue to get better. I believe revenues will grow substantially from here, and they will have positive cash flow, earnings, and pay off a lot of their debt this year. I believe it will trade into the ‘.30′s. I just don’t know when.