LIG Assets (LIGA): Loads of Leverage

The Residential Real Estate Reincarnation

You are not going to believe the idea I've found for you today. If you're a risk taker looking for a bargain, there's just no reason not to own a few shares of this idea- so long as you can own it cheap enough.

And, when I say a few shares, I mean a few hundred thousand. There's a lot of leverage in this idea as the stock so absurdly cheap. In fact, I've already purchased 300,000 shares in the open market at just under a penny- a total investment of $2800- a suitable amount for me to risk based on my financial situation.

You are looking at a chart of the Residential Home Builders ETF. With mortgage rates so low and much of the foreclosure homes left from 2008 absorbed by cash laden consumers and real estate funds, home sales and prices have been on the rise.

As such, the home builders are enjoying a new bull market- as you can see this ETF has run from $20 last July to $32 today.

Today's idea- LIG Assets (LIGA) was in position to take advantage of the real estate collapse. According to their unaudited financial statement, this company made a profit of nearly $1 million in 2012.

LIGA delivered revenues of $3.3 million and net profits of $900,000 in 2012.

Much of their income is derived from residential real estate rentals. This company owns 300 rental residences in Texas.

The company carries the value of these homes on its books at its cost- $22.6 million. The debt against these homes is $16.2 million, and I'll bet in a sale situation, the homes will sell for far more than $22.6 million. If all of them sold for a total of $30 million, it would only equate to $100,000 per home, and represent $7.4 million in profits yielding near $15 million in cash for the company to keep.

Goldman Research - The Hot Hand

If you've made any money with me on either Nuvilex (NVLX) or Plandai (PLPL), you would be well served to pay attention to today's idea.

Both of those stocks have rocketed in the past 30 days. One common element in both situations is Goldman Small Cap Research.

Rob Goldman has been a Small Cap analyst for 20 years which included a stint at Piper Jaffrey's Technology and Communications Team.

Rob published the first research reports on NVLX and PLPL- up 300% and 128% respectively in the past 30 days in the OTC Journal.

Today, just as I released this edition to you, Goldman published his research report on the company. I've read it- it's 8 pages and covers all the facets of their business.

Probably the most interesting excerpt from the report goes as follows:

"Separately, we note that we purchased a nominal number of shares in the open market in 2012 which marks the first time in 20 years that we have bought stock in any research-covered company and should be viewed as evidence of our confidence that the stock is a rare bargain at current levels. Thus, we rate LIGA Speculative Buy."

I'll have access to the report for you online in a day or two. For now, suffice it to say, Goldman has a $.20 price target on the stock and points to a book value of $.06 per share. He also points out that at 1 penny, the company's whole market value is only slightly higher than the profits they made last year.

Goldman also forecasts the company could earn $4 million this year and pay a cash dividend.
For all the numbers and positive information about the company, LIGA has been trading for the past few weeks at less than 1 penny per share. A recent surge took the stock back to $.03.

At $.01 or less, the market is saying LIGA is worth just over $1 million.

Their unaudited financials show $27.7 million in assets and only $19.2 million in liabilities.

You don't find bargains like this too often. I've accumulated 300,000 shares in the open market at just under 1 penny per share.

I'd love to see this one get up to $.10- a ten bagger. However, if it runs to a triple or better on my money, I might be compelled to take a profit.

Last month, it only required about 10 million shares of volume for LIGA to triple. 10 million might sound like a lot of money, but in reality it's only about $100,000 in stock changing hands.

I wouldn't be surprised to see the Goldman Report cause this stock to triple again. If it does, I might be inclined to take my profits, which you should view as a potential conflict of interest if you're a buyer at $.03 or more.

If you like LIGA, pick it up tomorrow morning under $.02- that leaves you lots of upside.

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