Everyone these days is looking for the next SPNG: a company that is a sub-penny, but has strong fundamentals, and growing revenues and profits. GreenChek Technologies is not it. But, it has an interesting story behind it and one that bears watching.
Energy plays in the Obama era always have the potential to bounce. As a company that has a “green energy” product, the potential of price moves on this stock is huge. The company, according to their website,
“provides innovative world-class mobile Greenhouse Gas (GHG) emissions reduction technology, while greatly enhancing fuel economy for the mobile transportation industry – with initial focus on trucks and locomotives.”
What the press releases don’t tell you is when they will start making money.
The company is late on its filings, and last year’s financials didn’t show much. They do, however, have a very active PR department. According to their PR releases, they are moving aggressively to create distribution in Europe and the Far East. I am curious when these moves will turn into income, though.
Let’s talk about the stock. As I have said many, many times. Fundamentals don’t matter that much with a penny stock. It is the chart that counts. The chart shows that the stock has retreated of late. The stock was trading at the upper range of the Bollinger Bands for several weeks and also trading above its 50-day moving average. Since June 11th, the stock has dropped off significantly from its high. The stochastics indicate that this stock might be nearing oversold status and the MACD is bearish. The MACD line is still above the signal line, but looks like it is going to cross in a downward fashion. Volume has dropped “off the table”.
In order to become a stock that is worth trading, the company must do several things: Raise capital to keep going, generate some substantive revenues (read: big contracts) and continue to play the PR game. News and hype is going to move this stock, but its gotta be something that people care about. Their press release today about the move into Thailand? Nobody cared!
In GCHK’s defense, they appear to have some great technology which has been validated by a third-party testing company (read here). Without the benefit of financials and some meaningful press releases (confirmed orders…President Obama coming for a plant visit, etc…), I don’t think I would touch this stock now.
Watchlist is fine, but be very careful of this stock.
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