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Barfresh Food Group (OTC: BRFH) The Most Profitable 7 Square Inches on Earth

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OTC: BRFH The Health Food Smoothie Craze

Quietly and unnoticed there is a major stealth bull market going on in the health food sector. Here’s some examples:

  • Organic pasta, breakfast cereal, and frozen pizza company Annie’s (NYSE: BNNY) came public at $19 per share on March 28th. Within one month, the stock traded up to $44 per share, yielding a 131% return in 30 days for investors lucky enough to get the IPO shares.
  • Since the market low in 2009, nationwide organic super market chain Whole Foods Market (NYSE: WFM) has traded from $10 to $85, delivering a mere 750% to investors over a 3 year period as the company continues to deliver an annual growth rate in excess of 10%.
  • Organic Grocer Fresh Market (NYSE: TFM) – a competitor to Whole Foods, was a $32 stock in 2011- today the stock trades closer to $52 for a 62.5% gain over the past year. Fresh Market delivered 13.5% growth in 2011.
  • Hain Celestial Group (NASDAQ: HAIN), a natural and organic food manufacturer, was a $16 stock in early 2011. Today, HAIN trades for about $45, delivering a 182% return for those who have held the stock for the past 18 months.
  • Monster Beverage Corp (NASDAQ: MNST), formerly known as Hansen’s Natural Sodas, was a run of the mill Southern California beverage company for many years. Hansen’s introduced a line of natural sodas and bottled carbonated fruit juices, and sales exploded. In the past year, MNST has run from $20 to $64- yielding a whopping 220% to investors who chose to hold the stock the past 15 months.

Attention health food investors- there’s a new food specialist in town. This company’s products have been marketed in Australia, New Zealand, and the Middle East for the past seven years, and the same management team is now in the US and ready to penetrate the market. They have perfected the product Down Under, and are now introducing it to a market 30 times the size.

Their specialty beverages can be found in over 1100 locations Down Under, and is about to take the US QSR (Quick Serve Restaurant) market by storm in the US.

For your consideration:

Barfresh Food Group (OTC: BRFH): The Most Profitable 7 Square Inches in the World

McDonald’s put their smoothie program in last year, and same store sales went up 6%. For an established restaurant chain like McDonald’s, a 6% same store sales increase is a massive gain. Its unheard and drove McDonald’s stock to all time high of $100 per share.

Once behemoth McDonald’s gets a result like that, every other chain follows suit to take advantage of the new trend and remain competitive. So, naturally, Burger King has introduced their version this year, complete with a major advertising campaign starring David Beckham, Jay Leno, and Mary J. Blige. I guess a 6% revenue bump is worth a major advertising investment.

Barfresh Food Group (OTC: BRFH) The Most Profitable 7 Square Inches on Earth

Barfresh Food Group (OTC: BRFH) The Most Profitable 7 Square Inches on Earth

The key ingredients in a smoothie are ice cream (or sorbet), fruit, fruit juice, and ice. So, if you’re a quick serve restaurant with fairly limited space to prepare new menu items, how do you put together a Smoothie offering to your customers? The difficulty is by far the ice- most QSRs do not have ice behind the counter- the only ice in the store is on the other side of the counter, and comes out of the soft drink fountain machine.

Enter Barfresh with the perfect solution, and no other food provider on Planet Earth can provide this same solution. It is patented in many countries around the world, and patent pending in the US.

BRFH sells this product to all kinds of customers- but their largest category of customer is the QSR- Quick Serve Restaurant. This is the perfect solution for a QSR to get in the Smoothie business with a great deal of ease.

All the store needs 5.5 ounces of water, seven square inches on a counter for a blender, and some freezer space. These specially designed packages sell to restaurants for about $1 each.

A high quality Smoothie can be made in a blender is just 30 seconds and served to the customer. Restaurants charge anywhere from $2.50 to $4.50 for the finished product, making the Smoothie one of the highest margin products on the menu.

Hence- my belief the 7 square inches required for the blender might be the most profitable 7 square inches on Earth.

It’s extremely easy for any employee to prepare, and there is zero waste, and a great margin- QSRs love this.

BRFH Ready to Deliver

The packaging process is proprietary, and took many years to perfect. Their patented production lines can be added on to any ice cream factory, which will allow the company to expand rapidly in the US without huge capital investment.

No one else in the world has the capability to put ice, ice cream, frozen fruit, and fruit juice in the same frozen package.

BRFH has completed the installation of its first production in an ice cream factory in Salt Lake City, and is ready to begin accepting purchase orders in the near future.

This product was developed in Australia, and the Barfresh Smoothie is served in nearly every Subway store in Australia, New Zealand, and the Middle East. Krispy Kreme is a customer as well, along with many other names that aren’t familiar to US consumers.

One important note: Barfresh USA and Barfresh Australia are separate companies with the same ownership. Founder Riccardo Della Coste is the CEO of both companies, and is running the show on both sides of the oceans.

You can invest in the US version now under symbol BRFH. The company has just completed its first US production line. This line is capable of producing about 7 million units annually. The company has been showing product in the US for 3 years, and I believe its first major orders are just around the corner.

I suspect the stock will trade a lot higher when the company starts announcing its first orders. A close relationship with a major QSR chain like Taco Bell, Dunkin Donuts, or Quizno’s subs would like send the stock screaming up the charts.

Barfresh Food Group (OTC: BRFH) The Most Profitable 7 Square Inches on Earth

Barfresh Food Group (OTC: BRFH) The Most Profitable 7 Square Inches on Earth

For risk oriented investors, this is the time to get involved- before the orders come.

Time to Invest Your 7 Minutes in BRFH

As I mentioned yesterday, all you need to do is commit 7 minutes of your time to watch a video on the company. I know everyone can afford to invest 7 minutes.

Click Here to watch the video and read a lot more about the company from another source.

Here’s the URL: http://www.gobarfresh.com/

Longer term, the QSR market in the US is 30 times that of Australia

There’s some other information you should have. For starters, I’ve purchased a lot of this stock through my company and my family account. I was instrumental in helping the company raise capital in the US to get the operations started.

I expect to be very active trading this stock- both buying and selling. I did both last week, and will continue to do so without any prior notification. I’m both hoping and expecting the company to start delivering its first purchase orders in the near future, and am hopeful these future events will have the stock trading much higher.

Much more on this company in the coming weeks. There’s a lot to know and understand.

I love this stock around the $1 level. I believe it could follow the same trajectory we saw with LUXR last month- trading to about $1.50, backing and filling, and eventually finding the $2 level over the next 4 weeks. Fundamental developments will have a lot do with the short term upside.

Longer term, the QSR market in the US is 30 times that of Australia, so the company has massive upside potential. QSRs are scrambling to put in a Smoothie program, driven by the need to catch up with McDonalds and Burger King.
Invest 7 minutes to watch the video- you can afford it, then own the stock if you are as compelled as I am.

A reminder: Catch me live on TV every Monday from 12 to 2PM eastern.

Simply go to www.bigbizshow.com, and click on the “Watch Us Live” button. I’m the guest host on the show every Monday.

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Liberator “LUVU”: Just Getting Started - Liberator (OTC BB: LUVU): Just Getting Started

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Liberator (OTC BB: LUVU): Just Getting Started

On January 15th I published my first coverage of Liberator (LUVU) when the stock was $.15. LUVU then proceeded to bore everyone to death by spending January, February, March, and April trading between $.15 and $.20 on fairly light volume.

However, when I saw the 2nd quarter numbers for the December ’11 quarter, I knew it was just a matter of time before the stock found an audience and its way to a valuation that is more reflective of the company’s achievements.

LUVU has tapped in to a growing segment of the economy that is widely followed by anyone but the retailers who want your business. Companies like Amazon, Drugstore.com, Walgreens, and CVS are all jumping on the bandwagon, and LUVU is the only pure play in the sector.

Since starting the company in 2002, LUVU has achieved over $60 million in revenues, and turned profitable for the first time in its history last quarter. Over $20 million is a real possibility this calender year- which is huge growth when one considers it took 10 years to get past the $60 million mark.

The stock has started trading beautifully. The audience is developing, and the next quarterly numbers will reflect LUVU’s best time of year- no wonder it’s trading so well out in front of the numbers.

Here’s a refresher edition for those who want to take another look- I believe there’s still tremendous upside from these levels.

Meet The Fockers Meets LUVU

Meet The Fockers is the 2004 comedic comic film starring Ben Stiller, Teri Polo, Dustin Hoffman, and Barbara Streisand. Greg Focker (Stiller’s character) is marrying Pam Byrnes (Polo’s Character). Her retired CIA agent dad (De Niro) wants to meet his quirky, hippy like parents- Hoffman and Streisand.

(OTC BB: LUVU) - Turns Profitable

It was the second movie in the franchise, and was wildly popular. The film cost $80 million to make, and ended up grossing over $500 million worldwide.

Roz Focker - Greg’s mother (played by Barbara Streisand), plays a sex therapist who specializes in senior sexuality. The plot line is hysterical, especially when Streisand interacts with uptight, ex CIA agent Robert Di Niro.

There’s plenty of sexual over tones in the movie, especially in light of Streisand’s character.

One of the unintended stars of the movie is some unique furniture displayed prominently in several of the scenes. This same furniture has been shown in several other Hollywood movies, and more recently on a very popular reality show- the Real Housewives of Atlanta.

Atlanta based Liberator, Inc (LUVU), a company that has generated over $60 million in revenues since its inception in 2002, came up with a very clever way to use left over foam scraps by turning it into portable furniture. The company is hitting new sales records every quarter, and is just starting to turn profitable for the first time in its history.

Liberator takes left over foam and cuts it into a variety of triangle and incline shapes to create specially shaped pillows and furniture. It’s primarily designed as bedroom accessories, but they make lines of bean bag chairs popular with college students and others.

While it doesn’t get a lot of attention, there is a whole new category of consumer products being categorized as Sexual Wellness or Sexual Well Being.

Visit the Web Site at www.soap.com. It’s a household and personal care site selling everything from discount diapers to toothpaste and hair products. There’s a category on the home page on the top menu bar for Sexual Wellness.

These products are getting main stream adoption rapidly. Liberator’s single biggest customer is Amazon.com. Amazon has a full product offering in a section known as “Sexual Wellness”. Click Here to visit Amazon’s product offerings in this category.

Drugstore.com, Vitaminshop.com, and Brookline are other retailers moving rapidly into the space. These products are no longer shopped for a seedy little specialty stores. It’s all behind closed doors, but it’s main stream now, and the market for these products is growing very rapidly.

Liberator (OTC BB: LUVU) Delivering the Numbers- Turns Profitable

This past December, LUVU delivered its best quarter ever. The companies top line came in at $4.3 million- a 17% increase from the same quarter in 2010. Gross profits were $1.25 million. For the first time in company history, LUVU reported a net profit of about $40k- this turn to profitability has investors taking a hard look at LUVU for the first time.

According to Business Week, the commercial sex industry is now ranked one of the “Top 5 Rising Industries for 2031″- expected to grow over 17% each ear. In 2006, this industry contributed $13.3 billion to the total US economy. You cannot afford to ignore this industry group- after all, It’s bigger than the NFL, NBA, and MLB combined.

At its current growth rate, this will be a $47 billion global industry by 2030. There are numerous research reports highlighted how the commercial sex industry has moved from underground, small scale operations to more normalized, main streamed companies.

For more information, read researcher Emily Empel’s on “The Future of the Commercial Sex Industry in 2030“. Click on the title to get there.

Conclusion- Your Upside

Lest you think there’s no money to be made in the few stocks in this sector, think again. Check out this chart.

This is Rick’s Cabaret. Yes- this was a reverse merger bulletin board stock many year’s ago. This $84 million per year company is been a smokin hot stock from time to time. As you can see from this weekly chart, RICK was $4 in 2009, and nearly $30 in 2010. Not bad if you owned it at $4.

LUVU is a story of clever American ingenuity. I love stories like this. Founder Lewis Friedman took discarded foam scraps and turned them into $60 million in revenues over 9 years.

Furthermore, in the Sexual Wellness category, LUVU is the only company that exists with a real brand. With customers like Amazon, Drugstore.com, Wallgreens, and VitaminShop.com, their products are easily attainable by Main Stream consumers.

Absolutely no one knows about this stock. I personally invested in the company about 3 years ago in a private placement priced at $.25 per share. The company was smaller than, but market valuations were richer. I had 100,000 shares- I now have nearly 90,00 shares left.

This chart tells the whole story. Even though it was only a $40,000 profit last quarter, it was a major turning point for the company. Once the profit corner is turned and growth continues, the bottom line can accelerate, and the market knows that.

I suspected this one will continue to trade up rather easily once investors start catching on to the growth in both their sector and their company.

There’s under 90 million shares I&O, so at $.385 the entire market cap is only $35 million-it’s trading at less than 2x annual sales, which is absurdly cheap.

I see no reason why this stock couldn’t trade into the $.75 to $1.00 range over the next 30 to 45 days as more investor get exposed to the story. From today’s close, this would represent 100% to 150% return on investment.

If you like this idea, I would act right at the open tomorrow, and of course use a limit order- I wouldn’t pick it up any higher than $.40 to $.45 on the first day. It’s important to own this stock before the March quarterly numbers are released as it’s generally their best quarter thanks to Valentine’s Day sales.

However, I do plan to cover every development out of this company for the next 30 days, or longer. Use $.30 as your SSL. Risk 10 cents to double your money or more.

Consider Rick’s Cabaret (RICK)- had you bought it at the absolute bottom at $4- you could have ridden it to $30. The move from $10 to $30 was still a triple, so there was plenty of upside after the initial surge.

Catch Liberator on The Real Housewives of Atlanta:

This company was recently featured on the Bravo Show the Real Housewifes of Atlanta. They make a visit to the Liberator retail store. WWW.Liberator.com is their retail web site.

Click Here to check it the Real Housewives of Atlanta show. Of course, I had never watched the show, but I have to admit this is pretty entertaining. This is the kind of publicity that makes shareholders a lot of money.

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Europe and Its Confederacy of Dunces

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November 10, 2011
Volume
XIII, Issue 103

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To: OTC Journal Members: 

Europe and Its Confederacy of Dunces

 

I’ve been kind of on the sidelines lately watching the developments in Europe and looking for signs the markets are shaping up. The market was down huge yesterday as Italian bonds are getting clobbered- meaning their short term interest rates are up, and their Government’s cost of borrowing is way up.

I’ve always admired the Italians. I don’t believe anyone can dispute the Italians have created many of the finest products in the world. The Italians make some of the finest wines, cars, glass, and fashions found anywhere on Planet Earth.

Italy, the epicenter of the Renaissance, has also created some of the greatest music and art the world has ever seen. This is the country that gave us Michelangelo and Leonardo DaVinci.

As if all that weren’t enough, Italy manages to shut the entire country down for the whole month of August. Everyone, except those in the tourist and service industries, stops working. Impressive. The way the markets have been since 2008, I’m lucky if I get a long weekend.

And, don’t get me started on the Greeks. Greece is one of the cradles of civilization. The Greeks invented Philosophy and Democracy. Most of the words in the English language can find their roots in ancient Greek.

So, how did these countries with such rich histories get themselves into such a mess? The stories out of Greece and Italy are absolutely trashing the markets now, and yesterday was another example.

Southern Europe is less prosperous and more troubled than Northern Europe, yet they are all bound by one currency. If the Italians and the Greeks could simply allow their currencies to fall dramatically, their goods and services would be more attractive to the rest of the world, and their respective GDPs could grow.

So, why is Europe descending into this giant mess? Well- it’s pretty simple, and super complicated at the same time. Let me give you the Reader’s Digest version. The Southern European countries are spending more than they are getting in tax revenues (sound familiar?).

There’s a possibility a number of European countries could actually go bankrupt- metaphorically speaking of course. If you’re bankrupt, you can’t pay your debts. Forget about paying off the debts- you can’t even pay the debt service.

This would have two major and immediate consequences. You won’t be able to bring in any new loans, so you won’t be able to support your quasi welfare states, and you’ll default on the amount you owe your bond holders.

So- who are these bond holders? They are the major European banks, who would then be improperly capitalized for a bank, and go down the toilet as well. Of course, this would create a run on the banks, and further downward you go.

One way out would be to let your currency devalue dramatically. But, there’s one currency for 17 nations. If the Euro gets clobbered, it would make Italian goods more attractive to International buyers, but the Germans would get less real money for their BMWs. Ouch.

It’s a bit of a mess, and the market responds to the headlines with violent moves one way or the other. The Confederacy of Dunces who are running Europe today are unbelievable. Here’s a little overview for your entertainment.

The Confederacy of Dunces

 

Meet George Papandreou- the future former Prime Minister of Greece.

Let me paint you a picture. You’re deeply in debt, you can’t generate the revenues to either service or pay off your debt.

Your neighbors and business partners don’t want to see you go down the tubes, so they offer to help. They offer to voluntarily cut all your debt in half, then they volunteer to write you a check for $140 billion so you have a little cash to tide you over.

Your neighbors and business partners walk away thinking they’ve done you a great service. I wish I had neighbors and partners like that- my financial life would be a lot easier.

Then, you tell those who have held out their hands and wallets in support that you “WANT TO THINK ABOUT IT”. In fact, you decide to do more than think about it. You decide to have a family gathering of all relatives- aunts, uncles, cousins, and the like get in on it.

You’re going to organize this family gathering as soon as you can get around to it, and let everyone vote.

This is exactly what the Greek Government decided to do. Instead of reaching for the life preserver, the Greeks want to think about it and have a nationwide referendum while they drown. Insane.

French politician Christian Estrosi nailed it when he was quoted as saying

“I want to tell the Greek Government that when you are in a situation of crisis, and others want to help you, it is insulting to try to save your skin instead of assuming your responsibilities”.

I couldn’t have said it better myself. Our political circus would be entertaining if it weren’t so scary, but these bozos take the cake. This is endless material for Saturday Night Live.

Taking the package was the hard thing to do because it came with austerity requirements, but it was the right thing to do. So, of course, the politician who’s heading the Greek Government didn’t have the you-know-whats to take the help because it might not have been popular with their welfare state.

So, Papandreou is now out as a result of his foolish and cowardly action. The Greek government is trying to figure out who is going to replace him, and there’s a lot of carrying on in Greek Parliament. It’s endlessly entertaining if it weren’t so troublesome for the markets.

So, so here’s our next big political winner.

Enter Silvio Berlusconi- head of the emergency government in Italy. This guy is something. He’s been elected Prime Minister 3 times and fired twice. He would never make it as a politician in the US with the powerful religious right having so much influence.

This guy has already been divorced twice, indicted for embezzlement and tax fraud, and has faced of 50 confidence votes in Parliament since 2008. His most recent exploit happened in January. Italian prosecutors are trying to get him to trial for paying for sex with a 17 year old Morrocan girl- Karina Keyek.

The news is Berlusconi will be out by Sunday, replaced with Mario Monti, a man seen as capable of restoring the national credibility and pushing through the austerity measures the world wants to see.

These are the characters running the European governments, and these are the politicians who are on their way out because they don’t have the political will to do what has to be done to save the European banking system from collapse.

Unlike the US in 2008 where, right or wrong, our government quickly developed a plan to save the banking system and avoid a Depression, Europe has many moving parts from various cultures, all with their own political agendas.

So, what really happened yesterday to cause a rout in the global markets? You won’t believe how innocent this seems. It is rumored a large Norwegian Oil fund decided to unload its Italian and Greek government bonds.

In the wake of the selling, the Italian 10 year note spiked to a 7.5% yield. The Italians cannot afford to pay more the 5% for funding in 2012. In order to stabilize the markets, the European Central Bank was buying Italian debt in huge quantities. Recently, Italy sold $5 billion in Euros at a 6.087% yield, and there was twice the demand for the bonds that were offered, so the market’s reaction was of course distorted.

It seems to me, while it is dragging out much longer than it would in the US, Europe can eventually implement a plan that will involve reduced spending by governments along with debt forgiveness and stimulus packages.

Don’t let the markets panic you on those violent days. The Europe saga will come out somewhere in the middle- not nearly as bad as the Bears would have you believe, but far from perfect.

It starts with getting rid of the Confederacy of Dunces that run those Southern European countries.

Tomorrow- an update on some of my still favorite stocks I’ve recently covered.

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Larry’s Look at the Markets: July 21, 2008

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It was a pretty ho hum day. The day started out reasonably strong as B of A came out and announced much lower write downs than the market had anticipated. Financials were up early, and carried the market a bit higher. The larger financial institutions are not doing as badly as the market would have you believe.

As usual, the market has totally emotionally over reacted to what people believe might be the worst case scenario.

Oil sabotaged a low volume day a bit as it rose 2 points. However, I know of a number of technicians who believe oil might have broken it’s uptrend line, and we could be in for a little relief from the unbelievable run up in that particular commodity.

As I have published in the past, I don’t know where oil belongs, but I do know oil’s recent parabolic rise in unsustainable, and something is going to change the pattern.

For those who believe the high price of oil is a death knell for the US economy, you would be wrong. I have friends who run businesses in Bulgaria, and they have been paying $8 per gallon for years, and their economy is growing at 10% per annum. It’s simply an issue of “getting used” to the new reality of oil prices.

There will be a 10 year bubble in alternative energy stocks- more on that in future editions.

We’re in the teeth of the most boring part of the year. Go play golf. Have fun with your kids. Things will change in the next month or two, and I hope for the better.

Larry’s Look at Today’s Market: 7/16- 12:50 Pacific

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Oil, oil, oil, oil. Huge bank rally today along with the first decent up day in the larger markets in the last month. The S&P 500 has dropped 220 points and the DOW has dropped 2,000 points since we’ve had a decent up day like this.

One decent day in the larger market does not make for a trend, and I am seeing no signs of a bottom in the micros except perhaps on the psychological side.

I’ve been reading some great hints the bottom could be at hand in some of the micros I am following. Yes, they have all been decimated this summer- with the exception of recent edition PLTG which is in the energy space.

Here’s some commentary I have been reading of late: EFSF is going out of business. Horse hockey. SPKL has closed 10 stores- simply false. In fact, most of the stores are doing great. Based on 22 years in this market, I can tell you these are the kinds of rumors that make for good market bottoms. Near at hand. Watching SPKL come apart has been particularly painful for me, but I made the decision to just hang in there and tough it out.

Oil down $8 in the last two days along with great earnings out of Wells Fargo today really put a bid under the market. It the first decent up day in a month.

Here’s the bad news- Oil has corrected nicely, but hasn’t broken it’s uptrend. Still intact. We need a close below $130 before it’s time to really believe, and it’s not here yet.

At any rate, I am going to keep watching, but I have kind of abandoned the idea of going short into earnings releases. Most of the stocks I am watching are going up into the earnings releases, suggesting they were so blown out there was no where to go even on misses. In addition, most analysts have the projected numbers ratcheted down so low companies can beat the estimates pretty easily.

I recognize this strategy is not working. Perhaps I should simply flip it over, and look at going long. Different markets call for different strategies.

Let’s hope today’s rally continues.

Larry’s Look at Today’s Market: 7/14- 1:00 Pacific

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Another miserable day for the markets, albeit not quite as dismal as last week. The market opened strong on the heels of a formal announcement over the weekend Freddie and Fannie would be bailed out.

However, about an hour into the trading day they started selling again, and the market hasn’t looked back.

In my view, the market has nearly reached crises proportion, but could be setting up for one of the best buying opportunities since 1987.

It was all quiet in micro land today, with most of my ideas holding at fairly anemic values. I am personally starting to liquidate many of the positions in my trading account- I’m getting liquid out in front of what I believe could be a once in a life time opportunity to buy cheap. There will be easy money made in the first short covering rally. Right now, the shorts totally rule the markets.

The first stock on my earnings watch list from the weekend edition reports after the close today. Genentech- (NYSE: DNA). The market is looking for $.86 per share in earnings.

Let’s see what happens after today’s close. I didn’t take a position as the stock traded down in today’s action. However, that could have been an indication to get short. Hard to say. We’ll see post close.

No position on DNA, but an interest to see how the market responds.

Earnings are out- the missed by $.04- the stock is down about 3 points in after hours trading. The profits were there for the taking.

Larry’s Look at Today’s Market: 7/10- 1:37 Pacific

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Another rodeo ride in the markets today. This is about as volatile a market as I can ever remember. I need Dramamine.

The rumored insolvency of FreddiMac and Fanny Mae had the market all riled up today, along with the $5 rise in oil prices.

Here’s a chart that is mind boggling:


This is a chart of the S&P 500- The faint yellow line is the 10 day moving average. The S&P has now spent 24 consecutive trading days below the 10 day moving average. Can you guess when this last happened? February of 1984. Over 28 years ago. This is a pretty extraordinary event.

I can’t help thinking the market is long overdue for some sort of move to the upside. The rhetoric is so negative you could cut it with a chain saw. This is the kind of mentality that makes for a great market bottom.

I can’t say when the turn will be. However, the market made a gallant attempt to come back towards the end of the day.

I reloaded on my RIMM options today just before the close. I picked up 20 of the 110 August Calls at $11.10 - that about a $22k investment. When the stock closed about one half hour later, I was in the money about $1100.

Since the market staged a reasonable comeback at the end of the day today, we could have a decent day tomorrow.

There could be a pretty furious rally before the end of the year as the short interest in many stocks is by far the highest in history, and that is the rocket fuel to drive stocks higher. It just needs to be ignited.

Nothing happened of any interest in microcap land today. Hopefully, next week will be a big more exciting.

Comments and questions are welcome.

Larry’s Look at Today’s Market: 7/09- 2:35 Pacific

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Yesterday’s gains were met with another sell off today. We are in the teeth of it right now.It’s the middle of a very tough summer, and if you haven’t sold whatever you wanted to sell, you’re probably close to selling somewhere near a bottom if you want to sell now.

Despite a big drop in the DOW down 236 with the NASDAQ down 60, there were some positives to take away from today’s market.

I really liked the action in oil today. Iran was testing nuclear missiles overnight, and in past years that would have made oil run up like crazy. Instead, the price of oil dropped $.40 per barrel, which makes me think oil’s meteoric rise might be coming to a close. A significant drop in oil would be huge for the markets.

New lows have slowed considerably. There were only about 100 new lows printed in each of the major indexes today, suggesting a bottoming process is underway.

The only bright spot in microcap land was Nighthawk (OTC BB: NIHK) which staged a kind of low volume mini rally. The company announced the largest remote disconnect order in its history- 1,000 units in one order. An east coast utility has been adding the devices where appropriate for their customers, and they could order thousands more. Hopefully, this will lead to more large orders.

Everything else we follow was down today on the usual summer’s light volume. We are right in the teeth of a pretty nasty low volume summer sell down, and the media is not giving anyone any reason to buy.

We are closing in on some pretty attractive bottoms in some of these small stocks, and investors with a six month time window could be getting in position to make some big returns.

Comments and questions are welcome.

Larry’s Look at Today’s Market: 7/08- 7:51 Pacific

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It was inevitable that the market would have a good day. Earnings season begins tomorrow, and the market might stop obsessing about oil and recession, and turn its attention to numbers. At any rate, some sort of rebound was inevitable. The market has now spent 20 days in a row below the 10 day moving average- it’s only happened twice in the last 20 years.

My call in yesterday’s edition for a short term, oversold bounce in RIMM was very good- the stock was up $6.38 today and closed at $122.04- Up substantially from the early AM going of $115 where I suggested pouncing.

In fact, I decided to sell my 10 August 110 calls- I netted about $2200 on a $12k investment in two days. I’ll take that anytime. I decided to hold the 500 shares I picked up at $116.85- looking for higher levels there.

In fact, let’s look at an LPO (Logical profit objective) for RIMM. Here’s the chart:

On the left you see the perfect 61.8% retracement I covered in Monday’s edition. On the right you see the LPOs. Your first stop would be about $124, which the stock will probably hit in the AM if the market’s move today carries over to tomorrow.

If $124 gives way, I’ll be looking for $131.50 as the next target price. I’ll probably hang in there and hope for that level.

If you sold the QID and jumped into this trade, you should be very pleased. These trades can be profitable when the micros are simply stalled, which is the case in the current market malaise.

Aside from an update on SPKL today via the BLOG, there’s not much for report on the microcap front. Hoping for some news out of one or two of these puppies in the next week or so.

Comments and questions are welcome.

Larry’s Look at Today’s Market: 6/17- CREE Stars Today: 3:25 Pacific

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There were two highlights from today’s trading action in the markets- first- the market tried to roll over and sell off after I suggested getting a little shorter on the last three day run up.

Secondly, for some inexplicable reason, CREE made a half way decent move today on moderately improving volume.

As you can see from today’s price bar, CREE traded to $27 before dropping back a bit. The last time I suggested getting aggressive with this stock was when it gapped down big on the Q1 earnings disappointment at the end of April at about $25.

CREE tends to trade very well when there’s a lot of media talk about the importance of evolving from incandescent bulbs to the new generation of chip driven LED bulbs. They last ten times as long and use 1/10th the power.

When the company has to deliver on numbers, it seems to disappoint Wall Street every time in a fairly big way.

In the early going I was convinced this stock would head to $50. I have withdrawn that opinion. They keep falling short on numbers, which means they don’t have the horses to get it done.

I don’t know why the stock traded up today. However, I believe it wants to fill the April gap and head back up towards $30. When (and if) it does, I am going to sell the stock and wait for another opportunity when it gets clobbered. Perhaps there is some international media on LED bulbs driving the stock right now. I’ll check the news feeds in the morning.

Aside from CREE, the market appeared to want to roll over tomorrow. We’ll see about the headline driven news and subsequent market move in the morning.

Aside from those two stories, it’s all quiet in microcap land, with no major change in the last day.

Larry’s Look at Today’s Market: 6/16- 3:25 Pacific

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I should have been watching the market, but instead I was watching golf today at the close. It was far more compelling entertainment as San Diego was front and center in the world today with Tiger Woods battling it out in an 18 hole playoff with ancient warrior Rocko Mediate. It went into extra holes, with Tiger simply outlasting the poor guy. I suppose Rocko wouldn’t have gone down in history as the greatest golfer ever win or lose, but you couldn’t help but root for the underdog.

The market has been rebounding the last couple of days after last week’s drubbing, and it’s setting up for me to get shorter, which is kind of what I was hoping for.

Had I been right on top of it last week, the NDX did hit my first target level for a nano second, and bounced. I would have sold had I been watching like a hawk, but I wasn’t and therefore missed the opportunity.

Here’s the chart:

As you can see, the NDX hit the 38.2% retracement level of 1907 and promptly bounced. I missed it, so I’m hoping for another chance.

My new target to get even shorter on this index is 1999- let’s just say 2000 to round it up. It’s the 61.8% extension of the correction, as shown on the chart. At that point, I will add to the position in either options of QID.

If it gaps up a little tomorrow, I’ll go in deeper and take my chances. A weak opening will have me on the sidelines until better opportunities appear.

In other news, there is literally nothing to report in microcap land. PNWIF has pulled back some, much to my disappointment. I’d really like to see it hold up over $4 to give it the best chance of getting a NASDAQ listing. I believe the Costco service has started and it’s going very well.

SPKL continues to languish between $.80 and $.90. No new buyers are surfacing, but there’s no real appetite to sell either. The company opened #40 last week, and more are coming in short order.

NIHK still remains on the quiet side. I haven’t heard from Doug Saathoff in some time despite my efforts to reach him, and TCGD remains in a clearance process with Homeland Security. EFSF is trading as if the direct response campaign is getting a slow start.
Lots of indications of interest for my microcap oil and gas idea- so I shooting for Thursday post close to give you guys the 411. It looks like a good speculation, especially at the current price.

This Seesaw Market is Making Me Nauseous

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The stock market is getting ready to break big time- the only problem? I’m not sure which way.

In favor of a strong market surge- the strengthening dollar (see a chart of UUP), and declining oil prices (the two might be going hand in hand).

The market was up nicely today in the first few hours of trading. Then, in a speech from Bernanke, he used the word “inflation” 29 times- hence the sell off, and the corresponding stronger dollar.
I keeping going in and out of the money on my trade in QID- I have been up nicely three times since entering the trade, and down a bit three times as well.

As long as the market remains stuck in this range, I have to assume I own QID a little too high. Therefore, when the next big sell down in the market comes, I will lock in my profits and look to take advantage of this range bound but fairly volatile and trendless market.

Here’s a chart of the QQQQs to give you an idea of whence I speak:

My bet has been the QQQQs are ready for a real correction after the post March two month unabated run up. However, as you can see, QQQQ is just griding in an ever tightenting range. The highs are getting lower, but the lows are getting higher. That’s a trendless market. It is due to break out of that range one way or another in a much bigger way pretty soon. Which was is the big questions.

Therefore, next time QQQQ gets down to the support trendline, I will sell QID and hopefully make a profit. If it goes up to the resistance line, I will buy it. I’m hoping to make some money using this strategy. Remember, QID will trade the opposite of QQQQ.
There are a lot of cross currents in the markets right now, and it’s really tough to call which way it will break.

On the microcap front- some comments for the Merriman PNWIF analyst for your review in a second BLOG, and other wise no significant break outs or break downs to report. Not much excitement right now, but that’s the way it can be sometimes.

The Market Continues To Tease Me

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My thesis that the market is ready to stage a correction seems to be right one day, wrong the next.

I’ve been looking for the right time to get shorter the market. My 2,000 QID keeps going in and out of the money- never really make too much or losing too much.

However, I did like today’s action in the markets, and bonds were strong, forcing stocks lower. Lately, there has been a disconnect with both stocks and bonds moving higher together- this is not usually the case. When money flow out of bonds, it pushes stocks higher, and vice versa. I continue to believe we are still in for a correction, and hope to get fully positioned to take advantage if and when the time comes.

Oil came down nicely in conjunction with Bernanke talking up the dollar- this works against my correction thesis, but is good for all of us in the long term.
I posted a review of PNWIF Q2 numbers today- there was one minor negative surprise, but great top line growth in their traditionally weakest quarter. The stock has held over $4 post making a fast run to $4.20 after announcing the deal with Kodak China. The Merriman analyst still sees the company delivering $.33 per share in fy’09. If the market is going to fully buy into that number, it should start pricing it in over the next couple of months. This one could be in line for a NASDAQ listing in fairly short order.

In other news out of microcap land- EFSF bounced off a new all time low. Something good is bound to happen here pretty soon. We are overdue. You have to either sell that one or be a long term investor. SPKL continues to run into a wall at $.90, but on not much volume. Lots coming on that one in June.  PNWIF continues to hold above $4, which I love.

Nothing to report on TCGD- they are in the process of obtaining certification on their technology for US airports. VTOK is doing nothing and nobody cares. CREE- I believe I will sell that one and get out the next time it heads to $30. They are not quite delivering the numbers to my liking.

Larry’s Look at Today’s Market: 5/21- 3:11 Pacific

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I’m giving myself a little pat on the back today, and I hope you are profiting from my last two editions and last week’s BLOG.

As predicted, the market is coming a bit unglued after a two month, pretty much unabated run up.

The CNBC contrarian indicator worked perfectly. On Monday, the network trotted out the usual cast of characters, all forecasting the “all clear” sign for the markets on the horizon.

All clear- hardly. Today, they had a few comments with a slightly more negative tone, and once we’re done another 100 points on the NASDAQ COMP they will have nothing but gloom and doom forecasters lined up to predict the demise of the American economy and civilization as we know it.

That will be the time to take another look at the long side for some of the recent high flyers that have entered corrective phases- Apple Computer (NASDAQ: AAPL) and Research in Motion (NASDAQ: RIMM) are two that come to mind.

In the meantime, my 2,000 shares of QID at $38.67 are now up a cool $3k at $40.20. The options I suggest- the June 38s at $2.50 (QID.FL) closed at $3.00, and the July 38s at $3 (QID.GL) closed at $3.90. Those are nice gains for 1 1/2 trading days.

If the market bounces back and tries to recover a bit, I am going to add to my position by picking up some of the calls or simply adding to QID. I believe there is a ways further to go in this correction, and my target for QID remains in the $44 to $45 range over the next couple of weeks.

The headlines would have you believe that the market’s sell off was all about oil today, but it wasn’t. However, oil is spiking to $134 in after hours trading. That’s not going to help.

The market’s real concern was all about the minutes of the last FOMC meeting, which were released late in the day. Within the minutes it was found the FED had downgraded its economic forecast for growth, pretty much committed to stop lowering interest rates, and raised inflation fears. All in all, not good for stocks.

On the microcap front- pretty much unchanged. SPKL cannot seem to break through $.90- EFSF disclosed CK41′s game plan for PurEffect yesterday, and it was received moderately well, and all the others remained quiet with very little price movement.

Tomorrow’s another day, and I’m hoping for a little relief rally so I can commit more capital to betting on a correction. If it keeps selling off, I will simply have to be happy with what I’ve got. This correction is going to be the pause that refreshes, and could set us up for an unusual summer rally.
Comments and Questions are welcome.

Musings Of Larry Isen On Today’s Action: 5/12, 1:15 Pacific

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Another snore fest in micros today, but a little excitement in the larger cap arena.

The excitement comes from RIMM, and now I have some losses to make up. This morning, RIMM announced the next generation of Blackberry- complete will all kinds of media rich and hi def stuff on the screen along with the new and more robust 3G technology.

I’m down about $13k on my puts, and I don’t think they are going to be worth anything with the stock closing today at $141.50. Over and done with. Ouch.

In light of crude now trading in the $125 range, I believe the market is defying gravity in the short term.

Earnings estimates for the S&P 500 have been headed lower except in the energy compound, and these high energy and food costs have got to act as a dampener for economic growth.

In the large cap world, we have enjoyed a nice rebound in April and May, and I believe a correction is in the works.

Here’s a look at the NASDAQ COMP with a Fibonacci retracement. This a reverse retracement look. The NASDAQ COMP cratered from 2730 down to 2156- December to March.

It has since rebounded to almost 2500. At 2511, it’s a nearly perfect 61.8% rebound of the whole move down.

The chart suggests to me we are nearing the point of upside exhaustion.

Before long, I am going to be suggesting shorting one or two of the indexes, or buying puts if you prefer.

I believe we are overdue for a little correction. When, and if it comes, I would use the opportunity to move into a couple of big cap names that have rebounded dramatically- AAPL for one, which I believe is going to $250, and RIMM for another, which I believe is going to $200.

Lots to cover this week. I expect some sort of update from EFSF. SPKL will have Q1 numbers out, as will NIHK. Look for BLOGS on both those events.

Musings Of Larry Isen On Today’s Action: 5/5, 3:50 Pacific

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Interesting day. The Cisco earnings buoyed the market early, but it couldn’t hold. New all time high oil prices at $122, combined with other rising commodity prices could not keep the market moving north.

The DOW closed down 200, and NASDAQ gave back just under $50. RIMM, a stock I want to see go down, finally pulled back under $130- so I’m starting to gain back some ground on my put options. I need the stock to drop about another 3 points to make some money- with a little luck, that could happen tomorrow.

Despite being a tough day for larger caps, we finally saw a little action in a couple of our micros today.

PhotoChannel (OTC BB: PNWIF) gets honorable mention for perking up nicely. The stock closed at the $3.78 level, up about 4% on the day. The stock also traded just north of 1/4 million shares, which is a nice volume surge for this issue. I’m looking for $4 so this darn thing can hopefully get the long hoped for and wished for NASDAQ SC listing and start getting more institutional sponsorship.

Spicy Pickle (OTC BB: SPKL) keeps trying to break through that $.90 level. Another 100k day- there have been a pretty consistent stream of those days. Persistence will break down resistance on the issue sooner or later.

Despite all the negative stuff going on in the overall economy, the dollar was up more than half a percent again- I believe money is starting to rotate into the oversold dollar, which may help mitigate the insane oil prices.

I think we’re going to get an update in pretty short order on where we are with eFoodSafety and its product line for those who have been waiting.

Tomorrow’s posting will be late as this one has been. Better late than never.

Comments and questions are welcome.

Musings Of Larry Isen On Today’s Action: 5/5, 1:30 Pacific

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Another day, another yawn. Sorry about last week. If you were looking for some daily commentary, I was otherwise occupied running around NYC for the week, and it makes it tough to get the content side in. The excitement of the FED meeting was the big story for the week, but I covered that in a Thursday/Friday edition.

I was in NY working on two new ideas I will be delivering before the end of the year. I’m going with less ideas, but bigger and better ones.

My observation today is one of frustration. I’m frustrated because there’s an evident change in the character of large caps, but no change at the small and micro cap level- yet.

For the first quarter of 2008, it was “Sell the Rips, Buy the Dips”. My single best trade of 2008 was the Monday morning after the Bear Stearns debacle was announced. Goldman Sachs (NYSE: GS) was simply beaten the morning, and I made $21k in two days by having the courage to buy.

In fact, I looked at a chart of AAA mortgage portfolio values today, and it is moving to the upside for the first time in a long time. The porfolios have appreciated from a low of $51 on a $100 par value to about $58- the chart has not broken the downtrend line, but it’s coming close. I’ll show the chart in a future edition- this is a very positive sign for the beginning of the end of the turmoil in the mortgage markets.

However, along with the micros going nowhere, I have been frustrated on the short side of the rips for the last month. Two of the four horseman of the last bull market- AAPL and RIMM just keep going up with no major correction in sight. I caught AAPL the first time, but now I holding nothing as it rockets. I am long a few put options in RIMM right now, and the stock keeps cranking higher.

On the micro front, the stocks I am covering are a snore fest at the present time. SPKL can’t seem to get through $.90- PNWIF gets Costco going, announces Australia, and can’t find any volume. EFSF has been silent on the DRTV campaign, so I guess investors are assuming it’s not working because the stock is very quiet. TCGD and NIHK are in comas. All in all, a very boring period in time.

On the plus side, I guess we needed a period of time where these stocks stopped going down, and simply traded sideways on low volume. We are right in the heart of that period, and I can’t wait for it to resolve to the upside.

On another note- I don’t believe the usual “Go away in May” strategy will work this year. The annual correction has already been priced into these issues, and the only question in my mind is whether we will have a decent rebound before the summer, or if we will have to wait until the Fall.

Daily Musings from Larry Isen: 4/30- 7:30 AM Pacific

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Sorry for the tardiness of this update. Yesterday I was in the air all day on long suffering Delta, and am firmly planted in wonderful Manhattan this AM. For those with questions in the BLOG- I got to them this morning.

I won’t be commenting on today’s market action until tomorrow as I will be in an all day meeting. Too bad- it’s a big day for potential progress.

Yesterday was another lackluster day as the market is pausing for the FED moves today. The market is expecting a one and done 1/4 point cut. Of far more importance is the statement- I continue to believe if the FED turns a bit hawkish on inflation in the statement, the market will love it.

Credit spreads are sabotaging the FEDs efforts. AAA mortgage portfolios have not found a bid, and Libor is stubbornly staying high against the short term fed funds rate- this means mortgage and credit card rates are not dropping in conjunction with the FED’s efforts.

There is an appetite for financials at the right price. Last night, Citibank did a new issue of convertible preferred- they were looking to raise $3 billion- due to demand Citi raised $4.5 billion. Since Jan 1, CITI has raised a total of $40.5 billion. That’s a staggering number, and shows there is capital available to replace the losses on mortgages.

In our small stock land, CREE is giving some ground, SPKL is very quiet, EFSF has given a little ground which in the past has been a buying opportunity. VTOK has crept up a couple of pennies of late. NIHK all quiet. TTGL and CPNE are both probably done for.

Of special note is a little long awaited news out of PhotoChannel. PNWIF announced the Costco service has started. Today, they announced they will be rolling out their service in conjunction Kodak throughout Australia.

Costco was no surprise, but Australia was. Let’s see if the stock can find a bid on this news.

The dollar has been firming slightly as the market expects the FED to be done easing. This should help commodities ease as the dollar firms, and be good for us all. The weak dollar has helped the big multinational companies, but it’s now gone to far and the price off commodities is killing the economy. This needs to change.

Let’s hope for a hawkish statement on inflation out of the FED today. I believe that is what the market is looking for.

Musings Of Larry Isen On Today’s Action: 4/28, 1:46 Pacific

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All quiet in the markets today out in front of the FED’s open market committee meeting tomorrow.

The market is pricing in a 1/4 point rate drop. I don’t believe it’s a mark moving event.

However, I do believe the statement is a market moving event. If the FED indicates they are close to the end of the interest rate lowering cycle, the markets will respond positively- if the FED makes an announcement indicating it is going to remain vigilant on economic stimulus, and isn’t too worried about inflation, the market will hate it.

We have arrived at a point that generates a lot of impatience- Stocks have stopped going down, but the volume has not materialized to push them back up. We are in that no man’s land where the market is trying to decide where to go from here. The “all clear” signal is far from being blown, but the market priced in a lot of doom and gloom rather efficiently in Q1. We are close to some sort of tipping point. I wish I knew for sure which way.
The indexes drifted up today on light volume, and the dollar gave a little ground- not much.

In the individual stocks in our little universe, there wasn’t much to talk about. SPKL continues to trade at about the same level as the $6 million investment after making a valiant try for higher levels 10 days ago.

EFSF is struggling- trying to trade lower on light volume. I don’t know if people are impatient for news of the direct marketing campaign, or if someone thinks something is awry. Nevertheless, the stock ground a little lower.

CREE turned out to be a great call in the $25 to $26 range last week, closing at $27.38 today. I sold my options for a short term gain of about $1,000 on a $5,000 investment. I’m now holding 3,000 shares of common stock at about $26.75 average.

AAPL is killing me on its way through $170. I was waiting for a bottom of $110, and it only got to $120. My mistake. Hard to buy now.

Tomorrow I won’t be publishing this daily a musing as it will be a travel day. However, I should get to questions in the BLOG by Wednesday morning.

If it’s one and done for the FED, the market could start to break through some key resistance points. Stand by for the next chapter.

Musings Of Larry Isen On Today’s Action: 4/22, 1:20 Pacific

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Today was all about oil and the dollar. Oil, making new highs the last 6 of 7 days, touched off the $120 per barrel today. Who have figured we would see these kinds of levels? Financial write downs were in the news again.

The markets didn’t like it, and responded in kind by giving back some of last week’s gains. Forgotten are the Google, IBM, and Intel earnings. Oil, and its widespread effect on US consumers, were the story of the day. The major indexes were all off about 1%.
And, speaking of hot areas- a fertilizer company went public on the NYSE today. It was priced at $32 and traded to $50- this shows were the strength in the market lies.

Yahoo numbers were out after the bell, and I believe their numbers are meaningless. It’s all about Mr. Softy buying them out, which also doesn’t matter other than to show there can be big boy consolidation. Microsoft wants to buy Yahoo! as a platform to try to take on Google- I heard one metaphor I liked- like two drunks holding each other up. Not much of a challenge, even combined. However, Yahoo came in at $.11 per share- and the stock is reasonably flat in after hours trading.

One of my favorite stocks is getting hit on a post close earnings release. CREE came in with $.05 vs the $.11 the market was looking for, and the stock is down to $28 in afterhours trading. As a reminder- buy around $25 to $26- sell covered calls in the mid $.30′s- this may be a buying opportunity.

Last week’s micro darling- Spicy Pickle (SPKL), was out with post close news today. Their Michigan franchisee has signed two leases for new stores expected to open this summer. The good stuff just keeps coming, and the stock is destined for higher levels.

Nighthawk (NIHK) followers responded pretty well to the weekend edition, with the stock eclipsing the $.05 level for the first time in a while.

All in all, a pretty lackluster day, but nonetheless important in the bottoming process for the markets. Clearly, some sectors are hot, others ice cold.