Headlines by Tom Heysek
- Concorde America (CNDD.PK) was in the spotlight last week --- seems like the beginnings of a short squeeze OR problems with the fundamentals. Here’s how we saw this commercial drama unfold last week. With swings in Market Value of $1.4 Billion in a single day, it is surely one of the most active cheap stocks of the year. We distinguish between fact and fiction --- INSIDE
- Also joining the ranks of the Pink Sheets last week, Trump Casinos & Resorts, new symbol, DJTC.PK --- this is merely the first step in a very long process. Our conclcusion: Based on Mr. Trump’s past close calls, and there have been two, that we know of…the first step is about as bad as it gets for shareholders. In other words, it can only get better for shareholders from here on out.
- At a stock price of 50 cents / share, $1,000 will BUY you about 2,000 shares of DJTC.PK. Apply the 30 day wait-and-see period to ALL Penny Stock purchases, and hope for the best. Based on market history, this stock price is unlikely to get much worse, and there might just be a positive bounce with even the smallest morsel of good news. The Stock Market is that hungry for news.
- Markland Technologies is revisited. This company was the subject of a recent “Daily Views” feature---here’s what’s happened, and likely to happen next --- just as “There’s no crying in baseball…!”1 “There’s no HOLD in Penny Stocks”…if you can’t justify buying more of a Penny Stock you own, then sell it.”
- Re-introducing the investment community to The ShortBusters Club --- not having been heard from since March 2000, when the NASDAQ shot up to 5048 and selling everything short was the smart side of the trade. The Shorts were always right…perhaps the tide has turned, and this segues into CNDD.PK
Companies Mentioned In This Edition (in order of appearance in this week's update) |
Concorde America (CNDD.PK) |
Trump Resorts & Casinos (DJTC.PK) |
Markland Technologies (MRKL.OB) |
Archer-Daniels-Midland (ADM) |
Microsoft (MSFT) |
P-com (PCMC.OB) |
PTS Products (PTSO.OB) |
Network Equipment (NWK) |
Cisco (CSCO) |
CMKM Diamonds (CMKX.OB) |
Durban Deep (DROOY) |
Newbridge Capital (NBGC.PK) |
(TO THE TUNE OF GHOSTBUSTERS)
“When the future looks bleak
And your stock is real weak ---
Who ya' gonna' call...Short Busters...!!!
When the Pump the Dumpers come
And you're feelin' kinda' dumb ---
Who ya' gonna' call...Short Busters...!!!
Concorde America debuted as a public company at $ 3 / share last month. In the last few weeks, it has attained solid recognition and support in the stock market, which eagerly embraced the bright prospects for the Company’s Basic Business, which is, providing unskilled labor in large quantities to private sector infrastructure industries in Europe. Our initial Report was published July 12 (view that report).
Frankly, we were surprised this Company attracted so much attention this early. Our view is that this unexpected attention reflects more the absence of anything else of interest going on in the stock market this summer than an inherent attraction to CNDD itself, nevertheless, the stock is now on the radar screens of just about all day-traders. This makes the Company an easy target to sell short, especially with misinformation.
In the final two trading days of last week, CNDD exhibited a swing in Market Value for both days of $1.4 Billion. Remember, the OTC Bulletin Board has a total Market Value of only about $2 Billion --- a statistic we present to ensure the average individual investor has a perspective on how visible CNDD has now become among the Penny Stocks, and in a relatively brief period of time.
Short Sellers are like packs of wolves, attacking in concert, which greatly exaggerates the swings in stock prices. CNDD reached a high of $8.90 / share on Thursday then proceeded to nose-dive to $2.51 by the close. The downward pressure continued Friday, before opening at $1.75 / share. It closed the week at $ 5 / share, up $2.49 for the week. We estimate about $50 million worth of CNDD stock traded last week, probably making it the most active Pink Sheet stock for the month of August.
The catalyst to this trading visibility and price-amplitude is a news release dated August 11th. The contents of that news release were inconsistent with the information provided to our research staff in the months of June and July, information that came directly from the Company.
The Almerimar Contract called for up to 700,000 workers over a 3 – 5 year period to be placed into the agricultural industry via a private sector Spanish Company. This alone represents about US$ 3 Billion in contract revenues. More importantly, given the published figure of a 40 million worker shortfall in Europe in the infrastructure industries (like Farming, Domestic Security and Domestic Services), at a recruitment fee of US$5,000 per worker, this represents a staggering $200 Billion Global Business…!
Concorde America, therefore, represents barely 2% of this industry potential --- and it is possible the enthusiasm for this stock reflected the investment community’s discovery of an overlooked, new industry. Indeed, if a company like Archer-Daniels-Midland is not looking into this industry, it should be---and so we wrote to the Chairman of ADM, Mr. G. Allen Andreas, just to alert him to a commercial opportunity for ADM’s shareholders. Click here for the basic July 12th Report on Concorde America.
All research on this site is compiled from information believed to be reliable --- and so it is with our original projections for CNDD. Our disclaimers tell you this (see our disclaimer). On the other hand, this inconsistency in public information may be nothing more than an internal management reshuffling, perhaps even a struggle. Such internal struggles are not uncommon in young companies like CNDD as management personalities must be realigned to achieve the company’s growth objectives.
We expect more information about CNDD’s commercial prospects to be forthcoming in the next few days, so stay tuned to this site, and place it in your Favorite Places as this late-summer investment drama unfolds.
Our suggestion to individual investors at this time --- remain on the sidelines for a few more days to see where this story unfolds. If the forecasts provided by management were unreliable, then the projected operating results in the Basic Research Report are unreliable.
If in the next few days, the Company re-validates projected operating results based on the information provided in June and July, then the stock most likely has a destiny with a $20 per share stock price, and probably soon --- especially if the shorts stampede at the same time to cover their positions. Ordinarily, there is no such thing as a “HOLD” when it comes to Penny Stocks. However, given the likelihood that an overly aggressive group of Short-Sellers have temporarily depressed the stock, hang in there for a few more days.
With the large cap companies in a tight trading range, it is not difficult to see where this added trading volume is coming from --- the overall market is bored with Large Cap ennui…! For example, Microsoft’s trading volume over the last ten days alone is more than 9 million shares a day less than the trailing 3 month average volume. At an average price of $27 / share, that’s a loss of $243 million in dollar value that is available to be invested elsewhere.
Penny Stock investing is different than conventional investing. There is no such thing as a “Hold” in Penny Stocks. Moreover, it is possible to know how a stock trades so well, that individual investors can trade a Penny Stock in a small range, and still make a profit. One of these is Markland Technologies. (MRKL: OTC.BB).
The stock is trading at about 50 ¢ / share, which means using our subscribers’ average financial commitment of $ 500 (yes, $500), you can probably buy 1,000 shares, plus broker’s commissions. Here are three links to set up an online account
All three of these online brokers can facilitate opening a new account to buy and sell these stocks. Here’s the MRKL story ---
The Group’s principal activity is to provide integrated security solutions to the Homeland Security marketplace. It provides emerging technology services and products to protect the country’s borders, infrastructure assets, and personnel. The emerging technologies include automatic detection of explosives and illicit materials and cryptographic systems for secure communications.
The Group’s principal end-customer is the United States Government. Until the big spending programs kick-in later this year, with $ 8 million in cash, the Company has the financial wherewithal to wait. Cash per share equals 29¢ (there are 27 million shares outstanding), Research believes there is absolutely minimal downside to this stock. And 1,000 shares sure has a nice ring to it.
Markland's significant patent portfolio of innovative gas plasma antenna technology can potentially create a new model for secure WiFi data transmission. Their new approach towards WiFi data transmission will enable the industry to provide very cost effective and secure WiFi products. Their business model is to create a patent royalty revenue flow for this technology commercialization opportunity in the WiFi marketplace. This marketplace is presently estimated at $4 billion per year and growing rapidly.
Finally, there is this from Aug. 3rd ---US Army's Night Vision and Electronic Sensors Directorate (NVESD) has just awarded EOIR Technologies Inc., a wholly owned subsidiary of Markland Technologies, contracts in the amount of $1,985,823 for EOIR to provide support services for the development and testing of airborne sensors and data collection platforms over a 24 month performance period.
The link to MRKL’s historical prices follows---
http://finance.yahoo.com/q/hp?s=MRKL.OB&d=7&e=4&f=2004&g=d&a=7&b=9&c=1998&z=66&y=66
The stock has ground down to a 10 cent to 20 cents trading range. On positioning 1,000 shares per trade --- it is possible to make a few hundred dollars as the stock moves up and down this smaller-than-usual trading range. Remember, this stock was as high as $ 4 / share as recently as April --- so even a mid-range target price of $2 / share will return a tidy profit---about $1,500 on a $500 investment.
Last week, we showcased P-Com (PCMC.OB) and PTS Products (PTSO.OB). Research was positive for P-com and negative for PTSO. In the process of checking out P-com’s corporate offices in Campbell, CA, on the return trip, we passed by the Headquarters for Network Equipment (NWK) --- a name out of the past…!
Network Equipment was once a darling of Wall Street. Its business today is providing global networking technology, primarily for mission-critical communications solutions.
In 1989, the Company was able to issue $75 million of debt convertible into common stock at $31.50 per share. Since then all but $24 million has been converted into equity (and the debt itself does not mature until May 2014). Meanwhile, the Company floats into and out of Penny Stock status (a stock price of less than $ 5 / share). Current Price --- $6.37 / share.
What’s remarkable about this stock price is that the Company has almost $100 million in Cash, or $4.19 in Cash per Share, two-thirds of the current stock price.
As illustrated in the five year graph below, NWK’s stock price has been below $ 5 /share for 23 of the past 60 months, or almost half the time. Here’s the link to historical monthly prices, followed by the graph ~
http://finance.yahoo.com/q/hp?s=NWK&a=05&b=30&c=1989&d=07&e=13&f=2004&g=m

It appears that the recent sell-off in this stock reflects the larger than expected loss reported for the first quarter of the current fiscal year (FY ends March). NWK has lost about 10% of its value since August 4th. Research indicates this is an oversold position based on fundamentals. To wit ~
- While Revenues for the first quarter (ended June) for FY 2005 were $29.1 million and 15% below first quarter Revenues of the year ago period, this compares favorably with $27 million in Revenues for the fourth quarter of FY 2004;
- While NWK reported a loss of 3 cents per share in Q-1 versus Earnings Per Share of 3 cents a year ago, Q-1 looks very good indeed compared with the Q-4 loss of $0.14 per share; and finally,
- With Cash per Share in excess of $4, the individual investor is, in effect, purchasing a stake-holding in NWK for about $2 / share (current stock price minus cash per share).
An investment in NWK at this time represents excellent value for the Individual Investor
In a market hungry for fresh thinking and new ideas, it seems to us that NWK would be a natural acquisition candidate for Cisco (CSCO).
In this joint-edition of www.uspennystocks.com, and www.winningstockpicks.net, and by popular demand, we provide you with some useful testimonials about the real-life investment experiences of other Subscribers --- here are just a few ---
“I invested $509.95 to buy CMKM Diamonds (symbol CMKX) and sold that position for $1,990.05 (after deducting $9.95 in Ameritrade commissions) less than a month later” wrote a USP subscriber called Triple-A. This was showcased in our July 26th Newsletter.
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This from Sid in Sydney (seriously) “I guess I’ve been a closet Penny Stock investor because I ONLY buy stock that are less than $ 5 / share. I like Gold Stocks. Last December, I had a US$2,000 Certificate of Deposit maturing. The new interest rate was 1%., meaning 20 bucks a year.
Instead of renewing the CD, I bought 800 shares of Durban Deep (stock symbol: DROOY) at $2.59. My total cost, including commissions to Schwab, where I opened the account) $2,109.95 (I handed over the bank check for 2 Grand and wrote them a check for $101.95).
Before the month ended, I was able to sell all 800 shares for $2,402.05 (after Schwab commissions), getting over $ 3 / share. Since then, I have bought and sold the stock 3 more times --- taking half my profit to buy more stock, and using the other half for whatever I want.
NOTE - we featured DROOY in our July 26th edition.
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“I am 86 years old. In your May 26th edition (click here for link to that issue), you mentioned the casino stocks. I love Las Vegas. First went there in 1957. I should have bought land rather than chase show girls, but in that edition, you mentioned a stock called Newbridge Capital (NBGC). I bought 10,000 shares for 6 cents…!
In less than a week, I sought it for 18 cents and made a profit of almost $1,100 on a $600 investment. Since then, I have bought and sold it twice, making a profit of more than $500 each time --- or almost a 100% return on my money.
Got an actual investment experience you want to share with us --- ? --- email it to editor@pennystocks.com
Got an specific comment on Concorde America --- let’s start a Message Board and email your posting to
messageboard@uspennystocks.com
1Tom Hanks, as Eddie Duggan, Manager of the Racine Peaches in the movie “A League of Their Own”
Disclaimer: The opinions and beliefs of these newsletters written by Tom Heysek and Andrew Kline are not the opinions and beliefs of the owners of this website.
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