PNWIF has been one of my best ideas in some time, and the picture just keeps improving. The stock has shown remarkable resilience post May to July correction, and higher levels look like they are definitely in store.
Not much has changed since the observations I shared in the June 25th edition. The Pixology acquisition is being assimilated- the expectations are for new deals with the likes of Costco and perhaps Rite Aid. They have their proverbial foot in the door at both companies.
If you are looking to get into this stock, and are looking for a pullback, Q2 numbers should be out by the end of August. When Q1 numbers came out, the stock took a pretty good hit as investors were reminded this is still a pretty small company.
Without further adieu, let’s look at the chart:
You can see what a great year we’ve had with PNWIF. This is a weekly chart. I started covering the company at $1.80 last September, and we saw a high print of $5 back in January. That’s about 2 /12 times your money in the first six months.
PNWIF leveraged the good fortune in their stock price by raising $15 million at $3.60. It’s dilutive, but at a fixed price, so not too bad.
They used most of the capital to buy Pixology, which about triples their annual revenue run rate to about $10 million.
After the post Q1 numbers sell off, the stock has turned right around and appears to want to challenge the $4 level again, which brings a NASDAQ Small Cap listing back into the picture.
The rebound has been impressive, and I believe the summer lows have been made. This stock could have another double or triple in it over the next year. It is a theme investment- a play on the burgeoning world of digital photofinishing. It is one of the only pure plays in the space, and as such could be a good acquisition target.
$10 is still a good possibility for PNWIF. Look for new relationships with some bigger names to get the stock really rolling. These larger players have to start implementing change right now to be in place for the Holiday season.
Comments and questions are welcome.
PhotoChannel has dropped below your SSL. Any thoughts. My 500 shares are down 50%. Ugly.
BD
Editor: Using the SSLs is a choice each investor has to make, and make them in their own style. If I had followed my own advice and dumped all my CPNE when it dropped below my $1.47 SSL, I would have preserved about $112k. In the case of PNWIF, their Q2 numbers are due out soon. At the end of this week. The stock seems to sell off when numbers come out as investors are reminded that the company is still pretty small. The numbers will not be presented with the combined result of them and their Pixology acquisition, which more than doubles the size of the company. I am planning on buying a few shares if it sells off on the numbers, but seeing it make a new low on Friday causes concern. If it does not start behaving much better between now and the end of September, I will probably sell the remainder. I’m not sure how you could be down 50% as I introduced this company at $1.80 last September.