ZAPZ got absolutely clobbered at the market open today, but has since started to make a comeback.  I believe the market misinterpreted some information that had surfaced on the company. In this “sell now ask later” environment, it’s not surprising.

ZAPZ published a news release very early in the day stating it had sent a purchase order to Mercedes Benz for $1 billion worth of Smart Cars.

Reuters then carried a news report stating the Smart Division of MB was not even aware of the order.

Marketwatch then carried a one sentence news release stating MB’s Smart division would not be delivering any cars to ZAPZ.

ZAPZ then countered by publishing a press release stating that a number of distributors of the Smart Car had committed thousands of cars to ZAPZ- giving the market comfort that ZAP would be able to get supplies, and sending the stock back up from absurdly oversold levels.

ZAPZ made a low of $1.35 in early trading, and as I am writing this BLOG at 10:30 AM Pacific, the stock has rebounded to the $2 level.

Well- one thing for sure- you can’t say this stock is boring.

As I understand the real story, the relationship with MB and their Smart Car division is still up in the air. ZAPZ CEO Steven Schneider visited with the MB parent company, and started the ball rolling in an attempt to make an arrangement directly with MB to purchase the cars.

At this time, I’m pretty sure parent MB has not said yes or no, and subsidiary Smart didn’t really know what was going on at the parent level.

ZAPZ could be simply trying to stir the pot and force MB into a decision. The poor performance of the Smart Division has been well documented, and that division can ill afford to turn down a $1 billion order.

I’m planning to publish a full news letter once I speak with Steve Schneider and learn all the facts. In the meantime, I hope some of the ZAPZ lovers were able to pick up stock below $1.50.  At this point, I would hang in there and wait for developments.

Your comments and questions are welcome. I’ll do my best to respond to questions with facts. Opinions are welcome on both sides of the fence.

BrandPartners was out with its Q1 earnings release yesterday morning. The company continues to deliver compelling results, and I still believe it is just a matter of time until this stock breaks wide open. This one is easy to hold for the long term.

The company delivered $2.1 million in operating profits, and $1.8 million in net profits- this equates to $.05 per share in earnings, putting the company on a clip to earn $.20 per share in 2005.

On the top line, the company delivered a little less in revenue than Q1 ’04. This does not mean the company is not growing. As disclosed in the results, the company stated a big slug of revs didn’t quite make it into the quarter.

$.20 per share in earnings for ’05- you do the numbers for the valuation. I give up. A 20 multiple puts us at $4 per share. A 10 mulitple puts us at $2.

The company is not standing still. They invested about $300,000 to open an office and begin sales in London. They have also announced the formation of a new division to focus on the 22,000 sub prime lending institutions across the US.

Look for at least $75 million in sales in ’05- and $.20 per share plus in earnings. Just my guess based on anectodal information from management.

Here’s a long term look at the stock. This is a weekly chart going back to last August’s rebound. The stock never made it back to it’s 61.8% retracement level I would have loved to see as the perfect entry level for bargain basement shoppers.

However, it appears a new uptrend has begun, and a little volume would help tremendously. This is just a question of waiting out this confused and low volume environment in my view.

Your questions and comments are welcome.

Xenomics was out with a follow up to news story to their news earlier this week on getting clinical trials rolling. 

I continue to be fascinated by the potential for commercial applications for the use of Transrenal DNA. It’s amazing to me that no one ever figured out that DNA did pass through the kidneys unfiltered. DNA can be used to identify a myriad of potential maladies. 

Clearly, the most immediate potentially profitable application for Transrenal DNA is as a replacement test for Amniocentisis- What pregnant women would not prefer a urine test over the insertion of an eight inch needle into her abdomen? 

XNOM announced earlier this week it had arranged to begin clinical trials at Long Island’s LIJ Health services. A follow up annoucement came a day later as the company announced it would also be conducting trials at Eastern Virginia Medical School. 

XNOM is now on a fast track to get its first commercial product through the FDA process. It won’t be a five year process- it’s a non-invasive urine test. They just have to show it works. 

As clinical data becomes available on test results, look for interest to start picking up in this stock. In the interim, if you are a long term investor and want to own a piece of a company with a revolutionary approach to DNA testing, this one has great potential. 

As always, comments and questions are welcome.

 

Shares of Virtra Systems are enjoying a little rebound today for the first time in a number of months. The company announced the installation of one of its systems at a branch of Utah Law Enforcement.

After trading in the $.32 to $.45 range during the second half of ’04, Virtra has been virtually cut in half over the past 6 months as the company has been existing in a complete vacuum of news. Orders for their virtual reality judgemental-use-of-force simulators have simply not been coming in despite a dearth of positive media coverage and kudos from the military and law enforcement communities.

There is one branch of the US Military that has verbally promised substantial order flow to the company, but verbal promises do not equate to sales. Like all branches of the US Military, their spending has been frozen for anything but essentials. Our military is pretty much out of money right now.

The supplemental budget working its way through Congress needs to pass and find its way to the President’s desk. This will provide an additional nearly $100 billion for military spending. The supplemental budget could be on his desk by the end of this week.

Virtra is not alone in its drop. The entire homeland security/defense sector is trading very poorly these days, largely due to the lack of government spending.

The passing of the supplemental budget will start the clock ticking. I would guess within 30 days Virtra will be able to announce significant new order flow. There are no guaranttees, but from what I’m hearing I like our chances.

In the interim, here are some thoughts as to whether or not the stock is a buy. As you can see, the stock poked its nose above the multi month downtrend line. It’ s too early to call it a trend reversal, but it’s a step in the right direction.

If you believe that past performance is the best indicator of future performance, VTSI is a high risk buy right now.The last time the stock traded to $.20 was January of ’04. If you had the courage to buy at that time, you doubled your money before the end of ’04 if you sold.

The management at VTSI will admit it has been a rough six months. However, their key customer is broke. Once money flows back to the military, money could flow to VTSI as well, and that will hopefully translate into a rebounding stock price.

For those with a propensity for high risk situations, this could be a bargain basement opportunity.

Tomorrow morning Hyperdynamics will cease trading on the OTC BB and make the jump to the American Stock Exchange. New ticker symbol: HDY

Clearly the market likes the move as the stock is behaving extremely well, closing at $2.94 today. The stock has added about 40% to its value since the announcement was made.

I still continue to believe the move to the AMEX portends much better results out of their Louisianna properties than anyone realizes.

After reviewing their last quarterly financial filing, HDY falls a little short in a couple of categories for the AMEX listing. Therefore, I am assuming the revenues coming out of the Louisianna properties, which are not reflected in the last filing, played a role in the successful upgrade to the AMEX.

As you can see from the chart, the market clearly likes the validation. If making the jump to the AMEX creates this kind of credibility, imagine what a partnership with a major oil company would do for the stock value.

Congratulations to those who hung in there through the recent downturn. Your patience is being rewarded.

Comments, questions, and high fives are welcome.