Going to Cash Will Cost You
 Despite a major rally in the foreign markets this morning, U.S. investors are waking up around the country with their collective finger on the sell button hoping to move their assets quickly to cash.
However, most of the research that I've come across lately indicates that heading for 'greener' pastures is not historically as profitable a decision as holding tight and weathering the storm.
According to a recent New York Times article that takes a look at a 2005 study conducted by the University of Michigan, "From 1963 to 2004, the index of American stocks tested gained 10.84 percent annually in a geometric average, which avoided overstating the true performance. For people who missed the 90 biggest-gaining days in that period, however, the annual return fell to just 3.2 percent. Less than 1 percent of the trading days accounted for 96 percent of the market gains."
Timing is Everything
Timing is everything folks, and most investors like ourselves never seem to end up getting back in before the market bounces back. Unless the world disintegrates over the next 5-10 years, a market rebound is inevitable. Since there indeed is not much upside potential in cash today other than short-term safety, if you have the money, I suggest looking hard for value in today's bargain basement environment.
Here are a few potential candidates
Outside of the small cap arena, I've fallen in love with CreditCorp (NYSE: BAP) over the past few months only to watch share price erode nearly 50% from its 52-week high. Peru's biggest bank should benefit greatly from the country's booming economy which is expected to grow by 9.2% this year despite the ongoing global meltdown. Shares now trade at around $40 vs. $73 on September 10th.
Also, some very sexy Asian and South American ETFs including the iShares FTSE/ Xinhau China 25 Index Fund ( (NYSEArca: FXI) and the iShares MSCI Brazil ETF(AMEX: EWZ) have been battered over the past few weeks as well. Although both nations have been severely impacted by the slowdown in the U.S., both stocks are now down 50% to 60% since January 1st. If the global markets rebound majorly, these could be two of the first stocks to rally.
On the other side of the fence there is Quantum Fuel Systems (Nasdaq:QTWW). The stock ran from under $.40 to over $3.20 earlier this year and has given back most of its gains despite commenting publicly on a number of very positive developments in its solar energy business over the past month or so.
Net-Net
With Wall St. bouncing back this morning in early trading after a global market rally and a number of solid companies now trading at major discounts, we suggest thinking twice before moving too heavily into cash.
Note:
Microstockprofit.com and its affiliates hold no position in any of the companies mentioned in this edition.
Labels: BAP, EWZ, EXI, Market Rally, Panic Selling, QTWW
QTWW Gains on Dismal Fossil Fuel Performance
 Quantum Fuel Systems Technologies Worldwide Inc. (QTWW) gained nearly 17% Monday by the time after-hours trading concluded on more than 4 million shares traded.
Although QTWW remains a concept company in my mind with roughly $3M in revenues and a bottom line of ($47m) as of its last quarterly filing, the company is surely building a very diverse portfolio of alternative energy investments.
Daily volume increased more than 400% Monday over last Friday and QTWW likely attracted some attention from investors fed up with failing oil and gas stocks. We saw a recent high of $1.72 on Monday and the stock could test $2.00 on Tuesday if it can bounce back towards $1.70 after giving back nearly half of its gains in after hours trading.
Labels: QTWW, Quantum Technologies
OTCBB Down But By No Means Out
OTCBB: Total Dollar Volume by Year
(2000 - 2007) Here's a comparative look at the total dollar value of all securities traded on the OTC Bulletin Board over the past 7 yrs - courtesy of the OTCBB itself - (chart to right).
As the chart indicates, dollar value dipped below $44 billion for the first time in '07 since '03. This is no bombshell since the economy has been shaky at best as of late.
The OTCBB also provides a graphic depiction of the monthly dollar value of securities traded on the exchange from 8/07 to 8/08 (chart below to left), which is also quite interesting in my opinion.
OTCBB: Total Dollar Volume by Month(August 2007 - August 2008)
As depicted by the chart to the right, total dollar volume has been dropping considerably over the past year with August figures representing a nearly 60% decrease. In addition, total share volume is down almost 20%. So, things have certainly been better for the exchange in past months.
While the overall Bulletin Board exchange may have seen better days, there are still a great number of compelling plays in this arena and a great deal of money to be made in playing BB Stocks.
Here's a few examples of some recent small cap success stories that should have you watching the exchange despite it being down overall from many angles:
Quest Minerals & Mining Corp. (OTCBB: QMNM) recent advanced more than 4,000% in just 3 trading sessions, running from $.0016 to $.075 from 6/18 to 6/23. Roughly every $1,000 invested at the recent low yielded profits of approximately $43,000. Not bad for three days of pointing and clicking.
City Loan Inc. (OTCBB: CYLN) advanced near 3,2000% Tuesday on 30K shares traded and followed up that performance today gaining 50% or $.05 on modest volume of 2.679. CYLN is now showing potential to reach higher highs as its financial situation improves and the company pushes forward with aggressive expansion plans. As I've mentioned previously CYLN operates in the somber, but prosperous auto title loan industry and could transform itself into a national market leader if growth objectives are met over the next 12-24 months.
Quantum Technologies (OTCBB: QTWW) ran from $.50 on 1/30 to more than $3.00 in July for +500% gains on sheer future potential despite a horrendous bottom line, for now at least.
Biophan Technologies, Inc. (OTCBB: BIPH) - a medical device company focussed on treatment of acute heart failure - gained 212% or nearly $.02 Wednesday on news it recently eliminated $2.3M in dilutive financing .
Location Based Technologies (OTCBB: LBAS) - a provider of personal location solutions - has seen its stock price surge from the $1.50 range back in July of '07 to a recent high of $10.61 this past summer for gains exceeding 600%.Labels: BB Exchange, BIPH, Bulletin Board Market, CYLN, LBAS, OTC Bulletin Board, OTC: QMNM, OTCBB: ATSX, QTWW
Quantum/Asola Ink Yet Another Solar Deal
 One of my favorite up and comers in the alt-energy space, Quantum Fuel Systems Technologies Worldwide, Inc. (Nasdaq: QTWW) announced a solar power-related joint venture recently with German partner and 25% owned Asola and a leading Italian renewable energy firm, EuroboxImpianti s.r.l.
According to the release, the deal could net $100M per year not too far down the road.
Although the stock has given back nearly $.17 since the news, QTWW holds a great deal of future potential and has quite a few logs on the fire in the alt-energy space. From hydrogen storage technologies to part ownership of Asola, a very progressive German solar power company, QTWW continues to build a diverse portfolio of green energy investments and capabilities.
The company also recently announced that its German partner is also contracted to build a solar plant in South Korea that could also yield roughly $100 million per year once completed. QTWW is certainly one to watch going forward, partially due to the large run in its stock earlier this year and partially because of its compelling green energy investment. The company is now one of the largest components of the PowerShare (NasdaqGM: PTRP), portfolio and should be on your radar screen going forward.Labels: Asola, QTWW, Quantum Technologies, Solar Power
Driving Tomorrows Technology Today
As the 3rd quarter comes to an end while confidence in the U.S. financial system dwindles like the New England Patriots Super Bowl chances this season, we can all take a sigh of relief in knowing that there's still a handful of companies out there that have managed to gain more then 100% YTD. One company in particular that I have come across that fits this mold is Quantum Fuel Systems Technologies (NasdaqGM: QTWW). QTWW is a part of the Russell 3000 index and was sitting at $0.50 at the beginning of the year. Since then it has gained more then 230% YTD hitting a 52-week high of $3.22 back on July 2. Since then the stock has retracted more than 56% and is currently trading at $1.40.  From alternatively fueled vehicles to hydrogen storage solutions, Quantum provides a wide range of products and technologies to OEMs, governments and commercial organizations need from concept to production. The company is currently working on a luxury hybrid car with design guru Henry Fisker. The Fisker Karma utilizes electricity for the first 50 miles. At that point, the combustion engine kicks in providing the driver with a sleek car that is capable of 120 MPG using Quantum's Q-Drive technology that was developed four years ago for the US Military.
QTWW is a clean technology company that offers products that suit a wide range of applications and a diverse consumer base in several key industries. These include: hydrogen & alternative, military/defense, aerospace, solar, hydrogen refueling and of course hybrid.
As I've mentioned before, I suggest keeping my eye on QTTW as they have the potential to become one of the largest players in the global alternative energy solutions marketplace.
Labels: Alternative fuels, Financial system, Fuel Efficient, Hybrid Cars, QTWW
Is The SmallCap Growth Story of 2008 Over?
 Quantum Technologies (NASDAQ: QTWW) shares are up nearly $2.30 since late January thanks in large part to record oil prices and the world's increasing focus on sustainable energy. Despite the recent run-up and massive increase in investor interest as of late, I'm still not a buyer at current levels.
Given the company's current fundamentals and the fact that the hydrogen movement - a key focus of QTWW - has yet to really gain momentum, I'm still viewing this as more of a story stock. A compelling story, sure. But still a story nonetheless and perhaps not quite a $3 story.
 Simply put, this is the best, small cap growth story that I have come across in 2008. From the development of hydrogen combustion engines used in the next generation of alternatively fueled vehicles to 25% ownership of a major global solar module manufacturer, QTWW is a fully integrated alternative energy company.
As oil prices surge, the market has left no stone uncovered in its search for alternative energy plays and QTWW appears to be a favorite.
Quantum boasts a list of clients and partners that now includes: NASA, Shell, GM, DailmerChrysler, Toyota, BOSCH, and Lockheed Martin. With a strong focus on hydrogen power, QTWW is quickly gaining worldwide recognition for its ability to develop technologies that make hydrogen a more efficient alternative to current energy sources including oil.
Historically, storage problems have been the main roadblock preventing hydrogen power from being mass commercialized in transportation-related applications. From both an economical and safety perspective, the element brings with it a unique set of challenges in comparison to other fuel sources. Now partnered with Boeing and the U.S. Department of Energy to advance hydrogen storage capabilities, QTWW appears to be tackling the problem head on and helping make H a viable power source.
According to the Earth Policy Institute in Washington, DC "Photovoltaic production has been doubling every two years, increasing by an average of 48 percent each year since 2002, making it the world's fastest-growing energy technology".
 In a move expected to yield $600 million in sales for both company's Quantum's 25%-owned German partner - Asola Advanced and Automotive Solar Systems GmbH - announced plans earlier this month to soon triple annual solar module manufacturing capacity to 45 MW (megawatts peak power). The agreement is already bearing fruit.
Last Tuesday, Asola announced a $17M contract from Sunworx GmbH. The $4.5M in revenues (25% of the deal) for QTWW could prove to be just the tip of the iceberg in regards to what the aforementioned relationship yields. Already benefiting greatly from an entrenched position in Germany - the world's fastest growing major PV market during 2006 and 2007, Asola is an ideal partner for QTWW as the company looks to diversify its alternative energy portfolio.
Financials are looking better as well. Here a few highlights for the company's third quarter filing:
* Total revenue in the third quarter of fiscal 2008 was $7.1 million compared to $2.3 million in the third quarter of fiscal 2007, a net increase of 209%.
* For the nine month period ended January 31, 2008, Company's consolidated revenues ($16.8M) were up 15% on from the corresponding period of 2007.
* Consolidated operating loss decreased from $5.8 million in the third quarter of fiscal 2007 to $3.8 million in the third quarter of fiscal 2008.
* Product sales for the Quantum Fuel Systems segment increased $1.7 million, or 213%, from $0.8 million in the third quarter of fiscal 2007 to $2.5 million in the third quarter of fiscal 2008.
* Product sales for the Quantum Fuel Systems segment increased $1.7 million, or 213%, from $0.8 million in the third quarter of fiscal 2007 to $2.5 million in the third quarter of fiscal 2008.
* Net loss decreased from $21.6 million, or $0.33 a share, in the third quarter of fiscal 2007 to $1.4 million, or $0.02 a share, in the third quarter of fiscal 2008.
* Net loss decreased from $124.3 million, or $2.05 a share, in the first nine months of fiscal 2007 to $80.3 million, or $1.06 a share, in the first nine months of fiscal 2008.
However, there are still a number of unfavorable factors associated with the company:
* The discontinued operations of the Tecstar Automotive Group business segment generated losses, net of tax effects, of $66.1 million in the first nine months of fiscal 2008.
* QTWW has stated that Future sales of substantial amounts of their common stock could affect its market price.
* The success of the business depends on the growth of hybrid and hydrogen based vehicles and the solar industry.
* Revenue is highly concentrated among a small number of customers.
* Negative EPS and P/E ratios, High P/B ratio vs. competition.
* QTWW may never be able to introduce commercially viable hydrogen products and hybrid propulsion systems.
* Long term solar cell purchasing agreement could result in higher than expected inventories and losses if market rates and demand drop.
* Documented history of operating losses and negative cash flow that may continue into the foreseeable future.
* Heavy reliance on GM partnership.
The company announced recently that it is conducting initial tests and trials on many aspects of its Fisker Karma (photo to left). The Karma is a plug-in hybrid that can travel 50 miles a day when charged every night and can reach top speeds of 125, continuously, in Sport Mode. The vehicle is being developed through a joint venture between Quantum and Fisker Automotive Inc.
With more than 80% of daily commuters traveling less than 50 miles a day, the Karma represents an ongoing fundamental shift in the auto industry towards Green vehicles and a major potential change for a U.S. economy currently plagued by exorbitant fuel prices, sky high inflation, and a volatile credit market.
While the $80K price tag may be a bit hard to swallow for many consumers, the concept behind the vehicle is not. With a life expectancy of 10 years and the ability to conceivably be refueled just once annually, the Karma is already gaining traction in the auto market, even prior to models becoming available.
From The Release: "Fisker Automotive is preparing to deliver its first Premium Edition vehicles by fourth quarter 2009. Currently, Fisker Automotive has received more than 500 orders for the Fisker Karma since its 2008 debut at the North American International Auto Show (NAIAS) in January. Fisker Automotive will reach a full production of 1,250 vehicles per month by the end of 2010. The starting estimated MSRP for the Fisker Karma will be approximately $80,000 or EURO 80,000"
I was reluctant to hit the buy button in both the $.70 and $1.30 ranges and given the company's laundry list of risk factors and potential need for financing going forward, I'm still staying away for now, but watching the story closely nonetheless.
Do I thihk QTWW has the makings of a great company? Yes. Do I think that is a great company today? No. QTWW just goes to show you that even in today's rough and tumble economy, there's still potential for a proverbial "5 bagger" in the sub-dollar range, even on less-than-stellar fundamentals. The market appears to be more than willing to pay for the potential here and some analysts have even set their 12-month price targets as high as $4.00. I however, am not.Labels: QTWW, Quantum Technologies
|
|
Despite a major rally in the foreign markets this morning, U.S. investors are waking up around the country with their collective finger on the sell button hoping to move their assets quickly to cash.
