To OTC Journal Members: 
 

New and Exciting

Recently I've become interested in Identity Theft as a growing industry. There's a lot of false information being flogged about Identity Theft and what it really is. 

Did you know that only 20% of identity theft is related to credit card fraud? The other and less obvious versions of identity theft include fraudulent medical treatments, tax benefits, employment, driving infractions, etc.

I've found a penny stock idea in the Identity Theft arena that I believe might be good for a trade. No one knows about it, but the company is growing by very rapidly using a strategy of teaming up with affinity organizations to get their very reasonably priced and highly effective product- a subscription based product- into the market. 

Stand by for a trading idea on Thursday after the market closes.
 

NF Energy (OTC BB: NFEC) Teams With Venerable General Electric (NYSE: GE)

Wow- giant news out of NF Energy today. Very exciting. The stock is up about 8% on the news, which is a big disappointment in my view. However, today's very high volume day should go a long ways towards setting this stock up for a break out. 

Today, just before the market opened, NFEC announced it has entered into a major expansion of its relationship with General Electric (NYSE: GE). NFEC announced back in July it had formed a strategic alliance with Shanghai based GE Alliance to identify projects the two companies could work on jointly.

The two companies are moving forward with four projects in 2010. These will be energy saving BOT (Build, Operate, Transfer) projects that will equate to over $10 million in revenues for NFEC in 2010. According to the press release, the four projects are comprised of an iron and steel factory and three fertilizer plants. It is anticipated each project will pay recurring fees for 8 to 20 years.

I'm guessing GE will provide both the financing and technology required for the projects. NFEC will provide technology, manufacturing, and installation. The press release doesn't specify, so I'm guessing. 

This year, NFEC will likely deliver about $25 million in revenues, and somewhere in the range of $.44 to $.47 in EPS. These numbers represent 50% growth over 2008, and it seems likely the company will deliver another 50% growth year in 2010.

Today, on the news, NFEC has only moved up 7.12%, and closed with an offer price of $4. However, look at the volume surge. The number of shares for sale at this price has to be finite, and sooner or later a few more volume days like this will result in a big breakout.

As you can see, there have been some relatively high volume days of late. Today NFEC traded about 105,000 shares. That's at least triple the daily average. 

A few more high volume days like today, and a breakout is inevitable. I don't have an idea who would sell the stock in light of the current news slate out of the company. I believe NF can earn over $.60 in EPS next year, and probably a lot more if they get their new wind component manufacturing facility open.

Unless I really need the money, I don't see me selling any of mine until it's double today's level.
 

Universal Travel (NYSE: UTA): Technically, Looks Very Strong

For those of you who read my comments on UTA over the weekend, you might have noted I was wrong in assuming the pullback to the $9 right to the $9 financing level was not a trading opportunity.

In fact, UTA is one of the few stocks I have no seen "hold syndicate bid" on one of these Registered Direct Offerings. Holding Syndicate Bid means the stock did not trade below the level of the financing, but instead turned right around and headed back up the chart.

Today, UTA closed at $10.05- so there was a trade. Had it traded much below $9, the investors would have cut their losses and pounded the stock. Since it traded down to and held $9, technically it sets the stock up to rebound. 

It was really refreshing to see one of these financings not kill the stock. UTA is highly profitable and should deliver earnings of about $1.20 to $1.30 EPS in 2009.

To me, this stock made a statement on the trading side- higher levels are imminent. A drop much below $9 and we'd probably be at $7 right now.

Stand by for news of the inevitable break out.

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