I released this pick on my Twitter site a few days ago and have followed it since.  I didn’t have time to do a blog on it until now.  I think that the trend is ZAGG’s friend once again.

ZAGG was one of last year’s stock stars vaulting from $1.00 to almost $8.00.  And, like most stars in the stock market, it was a “shooting star” and its fall was almost as dramatic as its rise. The stock hit a low of $2.10 just a few days ago (that is when I posted it to Twitter) and has made a strong recovery.  A recovery that I think might have some legs.

This is strictly a chart play.

Oh, yeah…what does ZAGG do?  ZAGG Incorporated designs, manufactures, and distributes protective coverings, audio accessories, and power solutions for consumer electronic and hand-held devices.  ZAGG is solidly profitable, has cash in the bank and no debt.

Will ZAGG get hot again.  Watch it and see.

Jeffrey Dean

Friday’s biggest price decliner on the NASDAQ was Yucheng Technologies Limited (YTEC). The only PR I could find was that the stock got downgraded from Market outperform to Market perform by Avondale, a research firm.  The stock was trading for under $7.00 on Thursday at close.  Friday saw a massive selloff and is now trading for roughly half that.

A typical market overreaction?  Maybe, but I thing that YTEC won’t be down too long.

Yucheng Technologies Limited (YTEC) describes itself as the “Leading IT Solutions Provider for the Chinese Financial Services Industry”.    Essentially, the company provides information technology (IT), software, solutions, and services to the banking sector in the People’s Republic of China

Here is what I was able to glean from the financials (9-30-09 Q)

• $1.18 in cash per share
• No long-term debt
• Strong cash position
• Great ratios
• Profitable Operations

True, the rampant growth of the company has slowed, but it is still a very strong company.  Traders and investors seem to be punishing the company for its dismal earnings report for 2009 and a less ambitious outlook for 2010.

Here is an annotated chart to demonstrate just how steep the drop was.

Of note: The stock dropped hard on Friday, but it gapped up at open today by 7 cents.  It appears that others suddenly saw YTEC as a bargain and bid the stock up.

Interesting stock to watch and now it is priced much more attractively for traders.  Will YTEC recover and close the bearish gap?  I am watching it with interest myself to see.

Be careful not to “catch the falling knife”.  My gut is telling me that the knife has stopped falling.  However, it may limp slightly downhill or sideways for awhile before it re-establishes a bullish trajectory.

The faint of heart need not apply.

Good luck and good trading

Jeffrey Dean

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I myself have trouble keeping track of all of the penny stocks and small cap stocks that I am watching, have blogged or issued alerts on.  I am trying out a feature that will be a part of my site going forward (I hope).  I want to list the stocks that I am following…. a watch list, per se.  These are stocks that I think that traders should be aware of.  Some continued to drop after I profiled them, but still present a good opportunity and other are on the “launching pad ready to take off” IMHO.

Without further ado:

VIVK - Vivakor, Inc. is one of those stocks that has been very frustrating.  I still like the company (here is a link to my original blog), but have seen it slide gradually from 14/15 cents at the time of my blog to as low as 12 cents.  It has recovered and closed yesterday around 14 cents.  VIVK still has great promise, but it is getting hammered by market conditions and trader apathy.  Here is a link to their chart.

CMIN - Constitution Mining is another of those frustrating picks for me.  I like the company, it has issued positive news, but it continues to fall.  So much so, in fact, that my trading stop got triggered and I sold out of my stock yesterday.  I am going to continue to monitor it to see about getting back in.  I still like the company (read my blog) and here is a link to a detailed chart for CMIN.

BZH - Beazer Homes, Inc. is a stock that I haven’t blogged, but came across yesterday doing my stock screens.  It has had a strong bearish run, but could be poised to recover.  They are a home builder (one of the biggest) and they have managed to stay in business, service debt and continue to build houses.  They should get a medal for that!  With bad news in the housing sector, they have taken a hit.  I think they can recover.  They look to be building a base at current levels (around $4.07), but any break below this price and it should be avoided.  Here is a link to BZH chart

LGDI - Legend International has been a good trader for Soupies (I even made some good profits trading it myself).  After my second blog on LGDI at 75 cents, the stock ROARED to a high of $1.60.  The stock has given about 25% of its value back recently, but now looks primed to resume its upward march.  It has been named on several lists as a “stock to watch” for 2010 and I am in agreement.  Here is a link to LGDI’s current chart.

AOB - Yesterday’s blog topic and a “great trader”.  Link to AOB’s blog right here!

I will add other stocks to this list as I think of them.

Disclosure: Long VIVK

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DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Neither InvestorSoup.com nor its affiliates have a beneficial interest in the mentioned company; nor have they received compensation of any kind for any of the companies listed in this communication. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

I did a screen for small cap stocks on a losing streak of over 7 days and came up with several Junior Gold stocks:  Golden Star Resources, LTD (GSS) and Apollo Gold Corporation (AGT).  One is a company that I would suggest putting on the radar and the other is one that I be very cautious with.

Part of the reason that these companies are here is because of the slide in the price of Gold.  Once gold resumes its upwards momentum, stocks like these could become supercharged

Be careful with  Apollo Gold

Apollo Gold is a junior miner that is increasing revenues incrementally, but not making any money while doing it.  Their losses, through 3 quarters, is almost $38MM.  I realize that a great percentage of that are paper losses from writedown of assets in 2009.  Then, the theory goes, if they have a strong balance sheet things should be o.k.  Unfortunately, they don’t have a strong balance sheet.  They have lousy liquidity ratios and  long-term debt that is due and payable and has been accelerated.  Things are so bad that the company has put its 50% interest in the Montana Tunnels Mine property up for sale.

Here is the chart with my annotations:

I would never suggest holding AGT long-term, but you can play the volatility.  This is not a stock for the faint of heart.

A Golden Star?

Like AGT, GSS can show a steady climb since December of 2008 when it was trading for only 50 cents.  GSS is significantly larger than AGT and could book over $350MM in sales for 2009.  However, they are showing losses quarter over quarter, too.  Their balance sheet is not pristine, either.  Their ratios are better, but GSS has taken on a great deal of debt.  The company is trumpeting the fact that 2009 was their best year ever, but they need to continue to increase revenues and get a handle on expenses for the investing public to be convinced.

GSS should be watched to see if it continues to decline and touches the next support level.  I don’t think it will. Seller exhaustion may have set in and prices could rise.

Both companies, I can only imagine, are hoping and praying that Gold prices come back.  And, it is not like gold prices have crashed, either. The spot price at 10:33 a.m today as I was writing this was $1,098.55.  But, in the mind of traders and investors, gold prices are “DOWN”.

Both are good radar stocks and could run on news specific to the company or about gold in general.

Good luck and good trading,

Jeffrey Dean

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DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Neither InvestorSoup.com nor its affiliates have a beneficial interest in the mentioned company; nor have they received compensation of any kind for any of the companies listed in this communication. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

I was tempted to have a title that said something like “Helix Wind…that company really blows”, but I thought better of it. That wouldn’t be too professional.  I am serious, however, when I say that my readers should take a look at the company.

Helix Wind Corporation (HLXW) is engaged in the design, manufacturing and sale of “small wind” vertical axis turbines (VAWT) designed to generate clean, renewable electricity from wind.  The key for HLXW is the term “small wind”.   The company makes its case for the small wind strategy on its site:

“Small (or “residential”) wind energy systems typically generate just enough power to meet the demands of a home, farm or small business. They range from 400 watts to 500 kilowatts or more and typically consist of a single turbine (vertical or horizontal). They can be significant power sources and have proven records of performance, even in locations with modest winds.”

Here is graphic evidence on how they are different:

This is not the typical propeller blade turbine that is used on the wind farm installations that are so popular these days. This is a uniquely designed, niche product that is scalable from a single residence (the S322) to the D15000 which produces enough electricity for 10 homes or a medium size commercial facility.   Helix believes that the VAWT configuration is superior due to the fact that functions in wind that comes from all directions and is well suited to gusty wind conditions which typical blade wind turbines are not.

Here is a link to HLXW’s website. It is a very well done site and has a great deal of interesting information on it.  They also have a Fact Sheet nested on their site that makes for good reading.

Now, lets talk about the company and the chart. The company is long on promise and good news, but short on cash.  While the company is booking revenues, it is losing millions of $ every quarter.  The Balance Sheet is no help.  The company is essentially insolvent according to their last quarterly statement.  I have confirmed that the company is raising capital and is actually in a “quiet period” before the announcement which could happen as early as next month.  The key shareholders are subject to a lock-up of their shares in conjunction with the capital raise.

The company has released info on potential orders, but it is sparse.  The Argentinian deal sounds good for the company, but near term it doesn’t appear to help too much.  I would like to see more press releases about sales and distribution.   The company has not issued revenue guidance for 2010 yet, but says they plan to later in the year once the financing is wrapped up and at least one more acquisition is closed.

The chart makes for interesting study:

HLXW is a company worth watching. The stock may have farther to fall based upon momentum and trend lines.  In their industry, there is no market leader in the small wind category.  HLXW wants to become that market leader and in my conversations with the company, they feel that it can be achieved.   Certainly, government and utility subsidies and credits will continue to help drive wind power forward.   But, HLXW has to achieve their financing goals first before “world domination” is possible.

Honestly, I have fallen in love with the product and think that, on its face, it makes a great deal of sense for the market.  If the company wants to install a Helix wind turbine on my house, I will love them even more.

Good luck and good trading,

Jeffrey Dean

Editor

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Today’s alert company is “mission-driven”.  Here is the mission that they are on:

Today’s alert company is: Biopack Environmental Solutions Inc. (BPAC).  And, it is a global leader in what is expected to be a $170 BILLION industry by 2014 - The “Sustainable Packaging Industry”.
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Reading a chart is sometimes like telling fortunes by reading tea leaves.  You may have a rare insight into a person or a situation by reading the leaves….or, you could just be full of crap!

I don’t think I am full of “it” when I recommend my members take a look at Microvision, Inc. (MVIS).  As recently as two months ago, the company’s stock hit a 52-week high of $5.75.  The stock couldn’t maintain its momentum and began to give most of the gain back and then recently announced a discounted equity offering that “finished ‘em off”.  It is a good thing to raise capital, but MVIS set the price for the stock with an offering priced at $3.00 (all to one institutional investor, by the way) and that predictably drove the price to that level.  It has recovered slightly, but still hovers around $3.19 as of Friday.

MVIS, especially with the latest capital raise, will have a strong balance sheet.  Even before this raise, the balance sheet was in good shape:  Good ratios, little or no debt, cash-in-the-bank, etc…  However, they are going to need every dollar with the burn rate that they are experiencing.  Great technology, but markets are only just beginning to be tapped and they are still in a big R & D push.

MVIS, the company, offers a technology platform that enables next generation display and imaging products.  Their main markets are displays in vehicles, projectors, wearable displays and bar code scanners.  I recommend that traders check out the MVIS Website. They have some cool technology that they think will be the standard in the years to come.

I also like the chart. The stock has taken its beating with the bad news (to traders) about the capital raise and the technical indicators are looking more favorable.

MVIS is a good radar stock, IMO.  The stock should be avoided for any break below the $3.05 range, but I don’t believe that it will break down.  The fact that an institutional investor is willing to pony up $9.3 MM for stock in a company that doesn’t make a profit, but has nice technology (and 115 patents at last count), is pretty impressive.

Long term this might be a good stock to own, but since I live in the short-term world….look for a ‘pop” in the near term.

Do your due diligence, but I like what I see with MVIS

Good luck and good trading

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DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Neither InvestorSoup.com nor its affiliates have a beneficial interest in the mentioned company; nor have they received compensation of any kind for any of the companies listed in this communication. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Just a quick heads up on one of my favorite stocks:  Legend International Holdings, Inc. (LGDI). I blogged it back on September 14th when it was at 60 cents…….good timing on my part because it ZOOMED to $1.11 in just a week after I blogged it. I believe the setup is very similar and a short-term bounce is possible.

I love this stock and this company.  LGDI is a very boring natural resource play….they are an exploration company that is exploring and mapping giant deposits of  Phosphate Rock….a crucial component of fertilizer and industrial products.  They own millions of acres of land in Australia (in proven mining zones) and are a well-capitalized, well-managed mining operation.

I will have more about LGDI in the future, but they announced some strong news today, too.  The company announced the formation of a strategic alliance with Wengfu Group Co. Ltd (Wengfu) for the development of LGDI’s phosphate mine, a beneficiation plant and a phosphoric acid plant in the Mt Isa region, Queensland, Australia.  Wengfu, once the DD is completed, will become an equity partner (joining an already prestigious group of institutional investors, including George Soros) and lend its technical expertise to LGDI.

Here is the chart….you can see the stock has given back much of its gains and has an attractive chart.

I expect that you will hear a lot about LGDI from me in the weeks and months to come.  I really like it!

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BlueWave Advisors, which is the owner of this website has been compensated a total of seven-thousand five hundred dollars by Legend International Holdings for coverage of LGDI.

I find banks really boring.  It doesn’t help that I used to work at a bank and when I was a CPA, I used to audit banks.  Every day on the bank audit it was like pouring hot coffee in my lap….excruciatingly painful.

Doing my nightly chart scans, I came across a bank that has an interesting chart, seems to be faring reasonably well financially and is a multi-billion dollar bank selling for around $5.

The bank is Marshall & Isley Corporation (NYSE: MI) I know!  A NYSE stock on my little blog.  It calls itself a diversified financial services corporation, but scratch the surface and it says “bank”.   I like the chart and think it should be watched for some more bounces, but I also like the news.

MI seems to be very handy at raising capital. They are getting oversubscribed for their issues (2 so far this year) and they are using some of those funds to pay off their dreaded TARP loans.  MI is not out of the woods yet.  They continue to post operating and net losses and still have the same issues that face all banks these days, but they have done a good job cleaning up their balance sheet.  Their “mark to market” adjustment was only $1.5 billion!  That is a lot of bad loans!

The chart:

As you can see from the chart, the pressure on the stock is to rise.  The Stochastics are deeply oversold, but now turning up.  The MACD is bearish, but the histogram indicates the lessening of the bearish trend.  It is still well below the zero line and I would like to see the MACD give more positive indicators before trusting it too much.  Both up and down volume have picked up lately….maybe it is under accumulation again.  You can see from the chart how far it has fallen from its recent high.

Much of this “evidence” of a bounce is anecdotal.  Yesterday, the stock was up 10%.  I would watch it to see if that trend continues.

Good luck and good trading

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DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Neither InvestorSoup.com nor its affiliates have a beneficial interest in the mentioned company; nor have they received compensation of any kind for any of the companies listed in this communication. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.