Monthly Archives: May 2009

OPMG Pullback Means A Great Buying Opportunity For You

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Options Media (OPMG) certainly took a wild ride today. With one hour to go in the trading day, the stock had shed 26%. By close, it had recovered half of those losses.

The fact that it fought hard at the end is a good sign and a classic example of what I call a “Wash & Rinse.” It’s a phenomenon of a stock shaking out weak hands before heading for higher levels.
After trading at $.62 back in late April, the stock has fallen to $.33 with significant volatility through May. In many cases, this volatility is followed by a shift above its 50-day moving average in a matter of days and headed higher.

In fact, I want you to think of this as a great opportunity to buy a great stock on the cheap.
Besides, none of the above changes the fact that Q1 numbers for OBMG showed a gross margin of 70%, generating $1 million per month in revenues from zero just one year ago.

With $3.3 million in all of 2008 and $2.2 million in Q1 ’09, that’s an annualized growth rate of 166%.

One more thing: The digital advertising market is not going away, and Options Media has its feet firmly planted for future growth.

NVLX Inks Marketing Plan For Gentler Tattos-Stock Soars 37%

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Say hello to an old friend, Nuvilex, Inc. (NVLX), a micro-cap stock we’ve been covering since 2007. Heading into trading today, shares of the emerging healthcare consumer products company sold for a ho-hum $.038.

In over two years, I’ve watched the stock start at $.18, hit a high of $.45, and sink to a recent low of $.03. By mid-day, shares rose 13% and finished up 37% higher ($.13) on some promising news.

Formerly EFoodSafety.com, Inc., Nuvlex reported today that one of its products, Infinitink (the world’s first permanent tattoo ink designed for easier removal) will be marketed, promoted, distributed and sold by Jayhur Enterprises in tatto-heavy Australia and New Zealand for the next five years.

So now we’ve got something to talk about. Nuvilex estimates that if Jayhur Enterprises
captures 30% of today’s market by the end of the agreement, the annual revenue could be as high as $3.75 million.

Get this…15% of Australia’s population over 15 years of age is considering a tattoo. Apparently, though, the permanent aspect of having “Mom” carved into an arm isn’t that appealing. These ‘fence sitters’ are excellent candidates for artists offering Infinitink tattoos. That group represents 25% of the over 18-year-old U.S. populatiJayhur Enterprises joins with MT.Derm, GmbH, Berlin, Germany as
Infinitink international distributors. MT.Derm owns Infinitink European distribution rights and since 2006 has been a development partner with Freedom2. Nuvilex is seeking a distributor for Latin and South America.

Infinitink was selected as one of Time Magazine’s ‘Products of the Year’ in its November 12, 2007 issue. Since then, Infinitink has undergone further testing and development and now some serious marketing efforts.

I don’t know how much higher the stock will go from here, but this could be the kickstart it needed to take off.

FAS On Fire After BAC Upgraded To “Buy”

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After taking a quick three-day $8,000 profit off the tables back on March 30 shorting financials using FAZ, the triple leveraged short ETF, today’s banking news tells me we were right on by maintaining a contrary position in its longer cousin FAS.

Today’s nearly 18% gain in FAS lifted its performance more than 200% over the past two months, currently trading at $10.31.
Basically Goldman Sachs urging clients to buy Bank of America (BAC) shares with conviction boosted the entire financial sector.

bank1.jpgWarren Buffet’s bet on Wells Fargo and US Bancorp and subsequent increase of both companies’ shares during the first quarter lifted the sector as well. Buffett made bullish comments about both banks during Berkshire’s annual meeting in early May.

I still see tremendous upside in the financial sector, possibly continuing its run to the $20 level if the following three events occur: if we experience the restoration of the uptick rule, the SEC eliminates the rampant naked short selling, and more changes are made with respect to the Market to Market rules.
If you took the FAS trade back in March you’ve enjoyed a good ride and remain a good way from our suggested stop loss of $3.50. If you didn’t and are looking to participate, I’m looking for a good entry level around $4.50.

Keep in mind that being a triple leveraged ETF it can move swiftly on the upside and even swifter on the downside. This one needs to be monitored closely.

Your comments are welcome.

Bad Economic News Good For GLD, DGP

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The Commerce Department released a rash of lousy economic reports this week, the kind that drives up the price of gold. Considering that we have positions in GLD and DGP (a leveraged ETF), the news isn’t necessarily bad.

First, retail sales dropped for the eight time in the past 10 months. Sales were 9.4% lower than in April 2008, down 10% compared with the same period a year ago.

Then, the U.S. trade gap increased in March for the first time in eight months as exports declined faster than imports. The trade deficit - the difference between exports and imports - increased by 5.5% to $27.6 billion in March from $26.1 billion in February.

Plus, that four-letter word the government hates to talk about, D-E-B-T has been rearing its ugly head in the media lately. Government public debt totals $11 trillion and counting (there’s actually A National Debt Clock in Manhattan that keeps a running tab). Debt climbs at a rate of almost $4 billion per day.

If you consider the government’s future obligations such as social security, health care and other contractual items, the total skyrockets to $71 trillion.

To pay back this debt at $1,000,000 per day would take 191,780 years! Instead of reducing the amount, the government just prints more money, making dollars worth less and less.

That’s when gold becomes alluring, valuable and very popular. While worries continue to mount about the economy, here’s what gold is up to:

The price rose $2 to $925.90 an ounce while the S&P 500 fell over 2%. In fact, it even gained in the face of the dollar’s rise. The type of demand seen in the morning sessions suggested that buyers of ETFs were catalysts for the strength.

Like we said when we first suggested adding a little gold to your portfolio, since bottoming at about $700 per ounce last October, GLD has been in a nice uptrend. I also said a break above $930 would be very bullish. At $925.90, it’s closing in fast.

We welcome your questions and comments.

No Need To Worry About Procera’s (PKT) Dip Today

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You may have noticed that shares of Procera (PKT) stock fell by 5% today. Don’t worry, there’s no reason for concern about the company’s health or future outlook.

The decrease in price is most likely due to Procera’s notification to the SEC that it intends to sell approximately 4.5 million shares of stock at $0.40 per share to raise cash in order to fill current orders. They total $1.8 million and will not be eligible for free trading for six months.

Procera is a software company in the business of helping ISPs (internet service providers) save money by routing their traffice more efficiently based on importance.

It will place the $1.8 million in convertible promissory notes, and expects to realize net proceeds of approximately $4 million after the completion of the sale and notes conversion.

Most likely, the share prices will roll right back up boosted by the fact that three global tier one service providers have purchased its PacketLogic systems in the first quarter of 2009. This could easily put $28 million in revenue in PKT’s pocket and earn $0.5 per share in 2009.

Despite today’s move, with Procera trading at $0.87, those who took our suggestion to buy back on April 20 are still sitting on gains of nearly 9%.

Jackson Spears, analyst at Robbins Group and personal acquaintance, has set his short-term price target at $2.

New UFood (UFFC) Partners Make Shares Even Juicier

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A joint effort with Healthy Dining and www.healthydiningfinder.com has made shares of UFood Grill (UFFC) even more appetizing.

While UFood has already earned a reputation for serving wholesome food that’s only grilled or steamed, this move shows its ongoing commitment toward keeping America healthy.

The fact that we have 58 million overweight people in the United States is behind the push toward eating healthier and the reason the Centers for Disease Control and Prevention (CDC) partially funded the launch of www.healthdiningfinder.com.

This go-to-guide for health-conscious consumers who love to eat out takes the guesswork out of identifying healthy choices on restaurant menus and nutrition information for each featured menu item is provided on the website.

UFood Grill is teaming up with Healthy Dining’s nutrition experts to offer guests a selection of better-for-you menus options and corresponding nutrition information.

Since 1990, Healthy Dining’s culinary nutrition experts have been guiding and inspiring chefs and restaurateurs to create and serve a selection of healthier dishes that emphasize lean protein, fruits and vegetables and whole grains.

A leader in restaurant nutrition, the company has worked with hundreds of restaurants and analyzed more than 15,000 menu items.

We first recommended UFFC when its shares sold for a lowly and attractive price of $.13. They have since risen 76% to $.23, including a 15% gain on Thursday-still attractive considering this new partnership and the $2.8 million in financing that it secured in late March.

With a growing, hungry and loyal customer base, we think UFFC has a great future and offers an opportunity to profit from the trend of eating healthier.

China’s GDP Forecasts Upgraded; FXI Poised For More Profits

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More good news popped up on the China front today, boding well for FXI  (our China ETF). GDP forecasts for 2009 and 2010 have been lifted from 6% and 9% to 8.3% and 10.9%.

These updated figures should go a long way toward impressing economists who questioned whether 6% growth could support the 25 million people migrating from rural areas to cities in search of employment.

Since we first suggested buying FXI-and turning a deaf ear to disbelievers-FXI has soared 40%. There’s no telling how high it may go now that the possibility of double-digit growth is back in the picture.

Could you imagine how any U.S. index would react even with the potential of 6% growth in the GNP? The bull would chase out the bear quicker than you can say, “I love America.”

Interestingly, the adjustment in China’s GDP is attributed to the global crisis triggered by the financial mess on our turf.  Like most global markets, China came tumbling down; although it had its own share of problems to work out.

However, it seems that the Chinese don’t stay down for long. They responded quickly to minimize damage from the Asian crisis in 1997, and they’re bouncing back quickly today with a very successful $600 billion stimulus package of their own.

Chinese officials have earmarked a good chunk of the money for an infrastructure overhaul and full medical insurance policies for its population, 90% of which should be implemented by 2011.

Many believe that China will leap ahead of Japan to become the second largest economy in the world. I’m not sure where that will leave the U.S., but maybe we ought to take a few pages from their book on growth.

Currently trading around $35, we believe this ETF could trade into the $60 to $80 range next year.

Comments and Questions are welcome.

China Energy: In the Middle of $3.4 Billion in Spending

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CGYV is giving it the old college try to bust through the $2 level today on the heels of news concerning the delivery of nearly $5 million in orders for mining concerns in New Guinea.

However, as far as I am concerned, that is not the really big story. Aside from recent evidence the economy is going gangbusters in China, there’s some really big news about how China is planning to deploy the funds for their stimulus plan.

According to a recently published article on a China devoted web site, in the last three months the Chinese government has decided to allocate 23 billion yuan (3.37billion U.S. dollars) for energy saving, anti-pollution, ecological and environmental protection projects.

CGYV is planted firmly in the middle of all this new money with the best solution for factories, and stands to grow quite dramatically over the next two years from this funding.

To read the article, simply click here.
Technically, the stock is trying.  $2 continues to be resistance, and in light of recent news I simply don’t understand why anyone would sell this stock at $2.

This is the fifth trip to $2 in the last month, and higher levels are inevitable for this stock. Based on the chart, there’s almost no doubt. It’s simply a question of when. Forces are building behind the scenes every day for a breakout. Stand by, and stay engaged.
Comments and questions are welcome.