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:
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.
Is it too late to stick my hand in it right now?
Editor: At this point, I would only stick in a finger. As I mentioned, it is up 122% since September with no real major correction. I was thinking this AMs year end numbers might cause a little bit of a sell off, but the market for this one is already pricing in Q1- which was calender Q4. Here’s the straight answer. If you want to own the stock at these levels, don’t put in more than 25% of the amount you would set aside for this idea. That way, if it keeps powering higher, you have some. If it doesn’t, you are ready to add to your position at the next correction. It could end up considerably higher than where it is today in one year.
Unlike Commerce Planet ,I missed the boat on this one, I know you dont have a crystal ball ,but which of your picks do you like most for performance in 2007? Thank you
Editor: I haven’t decided yet, but TTGL looks very promising. If just a couple more events fall into place, TTGL could be the best idea. Hard to say now for sure.
The company released a year end report not too long ago. Really, it did not tell us anything we did not already know – nice summary of what they accomplished. Plus, their music initiative was mentioned so if I know this company well. We are going to start seeing some progress in this area since they have not mentioned anything for about a year on this since they started partnering with PassAlong Networks. Anyway,the real anticipation is the Q1 numbers, right? Any idea when that will be out?
Editor: Since they are a Canadian reporting company, the information flow is extremely slow. By the end of February I believe is there regulatory requirement. So far, they have always taken the maximum time.
I collect ideas from all over but rarely move into one in any meaningful way unless I like not only the story, the company’s execution [best with positive earnings sustained and growing over a few quarters] and most importantly for timing, the chart pattern.
In my experience it is possible to do okay in the very short term with a hot chart and weak fundamentals or in the very long term with good fundamentals and a weak chart, but you need the spirit of a day trader for the former and the time horizon of Methusalah for the latter. I spent 25+ years learning the last lesson and 1999-2000, with encores from 2001-2003, learning the former. Almost all my very worst investment outcomes came from ‘story stocks’ whose theoretical prospects seemed too good to pass by at the time. Every time I think I have found an exception to this, it turns out badly. (VTSI is a good example from this universe; HDY was a reminder that accepting large political risk is like playing poker with wild cards that some crook gets to call as such, mid-game.)
With both fundamentals and a good chart simultaneously, it’s possible to do well in this lifetime and not necessarily give it all back in the blink of an eye.
Most folks are nice, and some are very nice, but 20% of the people you encounter turn out to be SOB’s no matter how charming they seemed at first blush. The same is true for stocks, so there are no guarantees.
How could anybody resist that PNWIF chart pattern leading up to the breakout? Now that it has spurted out, it’s unclear what to expect in the short term, although the story you marshal seems entirely plausible.
(I have to confess that in my weekly sort through different positions to keep the list manageable, I scratched my head briefly wondering where I had gotten the idea first to look at PNWIF, just as I couldn’t remember for the moment where I got the idea for CPNE. It’s all come back to me now!)
Thanks for putting this and other interesting ideas out. I received many unsolicited investment e-mail back seven or six years ago — who knows how I came to be on this list, though I probably requested it in 1999 — but of all those, this is the only one I retained.
Thanks for making me glad that I have.
Editor: Thanks for taking the time to pen some thoughts. I’m gratified you did well in this one. As you succinctly point out, a lot of the companies I feature will not live up to expectations. These days, I am far more focused on avoiding big losers. Get out of the 2 out of 10 that completely fail early, and your overall returns improve quite dramatically. I only view myself as a source of ideas with a large audience. You would be the ideal subscriber as you have your own style and discipline.
You might look at TTGL, and consider what would happen to their EPS if the non-cash expenses all went away, their costs went down, they received over $10 million in one time back payments, and their time line rose 30%. Great fundamental improvement. Technically, not quite ready yet.