I spent a lot of time this spring learning about Stem Cell Technology. I now understand just enough to be completely uniformed and somewhat dangerous.

There are a couple of things I do understand about Stem Cells: 1. They represent a true potential “cure” for many very nasty diseases. 2. Stem Cells can literally “morph” diseased or damaged cells into healthy cells, and 3. The demand for effective Stem Cell therapies is going to go through the roof over the next 20 years.

I also understand there are two types of Stem Cells- Fetal and Adult. Fetal are far more robust and a bit schizophrenic. Adult are less potent, but a little more predictable.

Adult stem cells are completely non controversial. Fetal are controversial because there is a perception a future “potential life” must be lost in order to collect fetal stem cells. This is simply not the case.

Unless there is a major change in the current political climate, it would appear the recent gains made by conservatives are giving way to a more liberal approach to certain issues. This is not a political statement of postition- just an observation.

I have two offering in the Stem Cell arena- Advanced Cellular (OTC BB: ACTC), and Medistem (OTC BB: MDSM). Each offers different kinds of opportunity in the same space. Medistem, through a licensed clinic in Costa Rica, will be actually treating patients with adult Stem Cells in the near future.

Advanced Cellular, over the long term, has the more interesting science. They have demonstrated they can create Fetal Stem Cells from fertilized human eggs without harming the potential life. The fertilized egg can be taken to term.

They are going to be starting clinical trials for their therapies later this year and into 2007- they are focusing their intial energies on eye disease, dermal repair (burn victims and other maladies of the skin), and heart disease.

Their management team reads like a Who’s Who in the Stem Cell field. It’s a remarkable opporunity in microcap form. They have been mentioned twice in NY Times articles.

I believe this stock will trade beautifully at some point in the future- whenever the market turns its fickle attention back to Stem Cells. Late this year the $3 billion California initiative to fund Stem Cell companies should clear a bunch of legal hurdles- I believe that could be the catalyst that puts a charge back into Stem Cells stocks.

In the interim, if you want a microcap position in a high risk/high potential reward stem cell situation, ACTC fits the bill. Here’s a chart:

If you want a full explanation of the expected ups and downs in this stock, please go back and read the initial presentation- you will find it in the current profiles archive section.

In short, in the initial presentation I suggested the stock would be subject to monthly swings, and therefore should be accumulated on dips. The downdrafts are generated by $750,000 worth of free trading shares that are awarded to financiers with itchy trigger fingers every month.

Therefore, particularly in tough markets like this, we can expect this stock to swoon every month. It is a very predictable buying opportunity. Notice in the chart I have circled the two moves up and down in the two months I have been covering the company. This pattern should continue up until the time the market falls in love with Stem Cell stocks again.

If you are thinking long term, and want to own a piece of a wonderfully exciting microcap stock with very futuristic technology, accumulate this one on the dips.

Comments and questions are welcome.

Everyone wants to know what is going to happen with HDY- including me. I am currently in at $3.215 for 5,000 shares- down $5k.

I have been reluctant to add to my position despite the stock’s history of rebounding off low points. Here’s why- In my view this company is pretty much worthless without obtaining the drilling permits. The previously highly touted natural gas properties in Lousianna generated a whopping $134k in revs in Q1- these properties were supposed to generate about $5 million in annual sales. There is a law suit with jv partners in the Lousianna properties alleging they misappropriated funds earmarked for Lousianna towards their Guinea project. I have no idea if this lawsuit has merit- I just know their Lousinna properties appear to be one big joke so far.

The Lousianna situation pales in comparison to the problem in Guinea. In my view, the majority of the market value of this company is tied to the eventual awarding of the drilling permits for the Guinea concession off the West shore of the African continent.

The market was optimistic a revised contract and drilling permits would be awarded early in 2006. The company has not been able to deliver the goods. Earlier in the year, HDY traded extremely well when any rumor surfaced management’s presence of communication with the Republic of Guinea goverment officials.

As time goes by, the market is less reactive to these peripheral events. In fact, I believe investors have reached the point where they will only bid up this stock if the company delivers the deal. No more free ride in the stock price. That appears to be over.

Drawing on many years of experience in microcap stocks, it is my belief and conclusion that the price of this stock will continue to slowly erode as they take longer to get a deal signed. Furthermore, the longer it takes, the less likely it is to happen in my view. I have seen this time and time again in 20 years of investing in microcap stocks.

Here’s the chart:

For those looking for the ever important 61.8% retracement level to add to positions, here’s a long term weekly chart. The longer term the time frame, the more powerful the chart.

As measured by week since last August when the stock began a rebound phase, the ideal entry point now would be about $1.92. Any signficant drop below that level on a weekly basis would be a major technical negative, and suggest it is all over.

I’m going to hang in there for now. If the stock blips up on fluff information I will sell it. If the stock blips up on the awarding of drilling permits, I will buy more.  If they don’t deliver something in the next few weeks, I will probably sell it with an eye towards buying it back if the tide turns.

Comments and questions are welcome. I’m sure there will be many, as this stock has developed a bit of a cult following with religious believers. 

BrandPartners was out with Q1 numbers earlier this week, and it took me a couple of days to get to writing my thoughts on their performance. When I looked at the numbers I simply got ill.

Here’s the long and the short of it: The corporate performance in Q1 was atrocious.  Revs: $11.1 mill vs $14.6 mill a year ago. Losses $1.2 mil vs $1.8 mil gain over last year.

It is often said the market’s job is to divorce you of your hard earned gains at the point of maximum fear, the market bottom.

I have been sitting with 100,000 shares of BPTR with a cost basis of $.60 for about 18 months, and I am officially throwing in the towel.

Despite repeated promises of improving results over the last several quarters, the previously forecast results have not materialized.

As if to add insult to injury, this year the company’s compensation committee decided to drop the employee option program to $.50- they are rewarding poor performance. Sounds like a government job.

As a further slap in the face, Chairman Tony Cataldo did not even extend us the courtesy of delivering his melifluous tones to the conference call, despite a generous salary of $30,000 monthly- for what, I am not sure.

In all fairness, Cataldo was instrumental in negotiating the company’s restructuring several years ago and pretty much singlehandly put the company in position to affect one of the most impressive turnarounds in history. It was impressive. That was then, this is now. What have you done for the shareholders lately?

Also, it would seem the company’s bets on Graffico and BrandPartners Europe are flops to date. Based on management’s comments, Graffico seems to be gaining some traction, but BP Europe has yet to generate a dime in revs, despite ongoing costs in the range of $1.2 million annually. The earnings could clearly use that money.

Since I have decided to unload my shares and take my lumps this will no doubt be the bottom. As I stated, it is the market’s mission to divorce you of your hard earned capital at the bottom. However, I have better uses for this money and feel there are better places I can put it to gain it back. In addition, my portfolio was extremely profitable in Q1 (see DXCM- a company that delivered on promised results).  I could use the tax loss.

Here’s a weekly chart going back to the Fall of 2004 when the company was performing beautifully.

Since the chart measures the stock price week by week, you don’t see the capitultion down to the current pathetic price of $.28. It is probably a buy here because it represents a heck of a value if they do turn profitable for the year as CEO Brooks predicts. The long term 61.8% retracement level has given way dramatically- very bad technically.

There is risk in the mic rocap world. Sometimes I sell them simply because they act like mental portfolio cancer. Cancer is best cut out so the patient can get healthy.

Many apologies to those who are getting their brains beat out on this one along with me. All I can say is I believed former optimistic predictions of a return to profitability and growth.

If they get back on track, I can always buy it back.

Comments and questions are welcome. 

I love it when a plan comes together. Like a trained hunting dog fetching a bird, Golden Peaks broke out Monday perfectly on cue.

I particularly liked the trading action in the early going yesterday morning. The stock behaved admirably, trading several hundred thousand shares early in the day at the recommended entry level before breaking out to a new all time high. As I write today’s BLOG, the stock is trading at $3.30 Cdn, up nearly 14% from yesterday’s levels in the first few hours of trading.

The breakout is confirmed. Here’s the exact same chart I put in the weekend edition, fast forwarded to this morning:

The stock had traded sideways on lessening volume since Mid April. If the uptrend were to continue, the next volume surge should take the stock higher.

The volume surge happened yesterday. Why, I can’t say for sure. Most likely, there were a lot of investors watching for the breakout. Early morning volume from the weekend edition might have served as a catalyst to bring investors off the sidelines.

Now that the stock has broken out, if you don’t own it and want to, I would recommend waiting for mini retracements to get on board.

I am looking for $3.75 to $4 in the short run, much higher in the long run. As it stands right now, I would be very happy selling my 25,000 shares at $4. FYI- I own it at about $2.90 Canadian ($2.62 US).

Comments and questions are welcome. 

Advanced Cell charged out of the gates this AM for no reason I could figure out until now. The company put out what appeared to be a fairly benign press release, and the stock has become a good solid rebound phase on a big volume day.

As it turns out, the company was once again mentioned in a feature article in today’s Wall Street Journal. Full text below.

The market is currently obsessed with commodities- oil and gas, gold, etc. Biotechs have suffered during this rotation of capital.

As I covered in a recent edition, it might be time to start looking at companies in the biotech once again. The stocks are oversold and closing in on a bounce.

Today, ACTC bounced hard. The stock has admittedly done poorly since I started covering it. The timing was unfortunate in that I introduced the company just before the recent mega surge in oil and gold, which turned the market’s attention elsewhere and caused the stock to swoon.

Here’s a chart of our history with this stock:

As you can see, the stock has dropped from where it was after my first edition. The drop coincides directly with the surge in oil and gold.

However, if you want to own a piece of an underfollowed situation in the Stem Cell space, ACTC fits the bill. Details in the first edition I wrote on the company. Click Here to read it.

The article references human cloning. ACTC is not in the business of human cloning. ACTC has very unique technology which, through cell splitting, has the potential to produce custom made embryonic stem cells, targeted for individuals with no harm to any human reproductive process.

This little company’s achievements are important enough to garner attention from the Wall Street Journal. Here is the text of what was published today:

I view ACTC as a little longer term idea, but it is an outstanding way to participate in the future of Stem Cells without committing a huge amount of capital.

Please read my original presentation on the company for more details.

At this point, if you want to take a position, you need to have a longer term outlook (over one year) for maximum potential return. Comments and questions are welcome. 

The purpose of this BLOG is to provide users with real time content when stocks are volatile- either oversold or overbought. It also serves as a forum for users to ask questions or share points of view. So, let’s use it.

US Energy (HYFS) dropped from $.38 to $.29 today for no apparent reason on very light volume relative to the price movement.

In short, I believe this swoon is a perfect window of opportunity for either traders or long term investors. I checked with the company- there are no negative unpublicized events causing the swoon in the stock.

Going back to our theme of buying smart and accumulating on dips the stocks that are trading well- check out the nearly perfect 61.8% retracement in this stock:

The perfect 61.8% retracement would be $.276. At $.29, you are close enough. Also, note the volume bars circled at the bottom of the chart. Note that the up days are generally much higher volume, and the down days are lower volume. This suggests the stock is under accumulation.

I believe this company will begin to deliver much stronger evidence their fuel saving technology will be adopted in fairly short order. The stock could rebound any day.

Strong, strong, strong buy recommendation on this low volume swoon. At $.30 or less it could easily be good for a trade.

Comments and questions are welcome.

Recently I have been asked to share my thoughts on Teleplus- TLPE on the OTC  BB.  Investors are confounded by continuing  positive fundamental developments which suggests the stock is undervalued, but it seems to be going nowhere.

I have taken some time to review the pending registration statement for the shares underlying the $9 million in convertible debentures the company has filed. If you look at the SEC filings, you will see several versions. You can identify them as “SB-2/A” if you want to have a look for yourself at SEC.GOV.

In my view, despite ongoing strong fundamental growth, this stock will be going nowhere for sometime to come, and could have significant downside if the note holders become aggressive sellers.

Here is the key phrase out of the Registration Statement:

“ The secured  convertible debentures are convertible at the holder’s option at a conversion price equal to the  lesser of (i) an amount  equal to $0.275 or (ii) an amount  equal to 95% of the lowest volume weighted  average price of our common stock for the 30 trading days  immediately  proceeding the  conversion  date. The debenture is secured by substantially all our assets.”

TLPE is registering nearly 300 million shares on behalf of the noteholder. This note holder can sell all the stock is chooses to at a 5% discount to the market, no matter how low the market goes.

This could become what is known as “Death Spiral” financing. As such, it would be my expectation that this stock is going nowhere for sometime, and could even begin to collapse and spiral down out of control if the noteholder wants to get aggressive.

To learn more about the toxic nature of convertible debentures like this one, you can Click Here to visit the description at the SEC Web site.