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Pinnacle Energy Corp. (OTCBB: PENC) went unchanged Monday on news that the company has signed a letter of intent to form a royalty land organization with Clayton Resource Partners that will facilitate its diversification into the coal and coal bed methane marketplace.

According to today’s news release, both parties expect the deal, which will most likely result in a restructuring of the current management hierarchy and enable Pinnacle to effectively target privately-held owners of proven coal reserves for acquisition, to close within the next month. Read the rest of this entry »

Pinnacle Energy Corp. is out with news today that bodes extremely well for the company’s future. The emerging independent oil & gas producer plans to make its foray into the coal marketplace in effort to diversify its energy portfolio.

PENC is reportedly pushing forward with efforts to execute an acquisition of a number of coal reserves and related assets located in Montana and Utah that management stated today hold the potential to significantly improve the company’s financial performance.

While preliminary details are limited, it is promising to see Pinnacle taking steps to facilitate growth. Although the coal market has slumped as of late, analysts are confident that a rebound is inevitable. 

Sure, the Obama administration pledges to invest heavily in renewable energy over the next decade in effort to reduce our carbon footprint and end our reliance on foreign oil. However, in the mean time, coal provides nearly 50% of the energy used in U.S. electricity generation. 

Until this figure begins waning considerably, opportunities for coal producers and potential coal producers such as Pinnacle should be robust.

The National Bureau of Economic Research effectively mastered the obvious Monday with the pronouncement that the U.S. economy is in a recession. Over the past 6 to 12 months, everyone from stockbrokers to street vendors have felt the pinch as the credit market dried up, jobs disappeared, and 401K’s were decimated. Although the average recession lasts 13 months, it’s becoming quite apparent that this most recent economic slowdown is anything but average.

So, as the Dow dips again and crude oil retreats below major psychological support at $50, a prolonged recession seems imminent. However, while the financial markets remain a collective mess, some public organizations are exhibiting their ability to thrive in troubled economic times and produce gains for investors. Two of which that I have identified in recent months are Pinnacle Energy Corp (PENC) and City Loan Inc. (CYLN)

PENC up 58% in 3 Days

Over the past 4 trading sessions, shares of Pinnacle Energy Corp. (OTCBB: PENC) have rebounded nearly 93% from their 52-week low of $.41 reached on 11/24. With regard to other bullish trends currently being exhibited by the stock, PENC is up  $.29 or 58% from its 11/25 close and has seen 10-day volume more than double.

Even though crude oil is now just about $100 cheaper per barrel than its July highs and gasoline is now priced above $2 per gallon in just 3 states, junior oil & gas exploration company PENC holds a great deal of future potential and investors are taking notice. The company continues to secure additional leases for crude oil and natural gas reserves and has publicly stated potential drilling plans through 2011 that include as many as 43 wells.

Pinnacle, which plans to commence drilling operations in 2009, recently announced a property acquisition expected to bolster its proven, probable and possible reserves of up to 214,000 barrels of oil and 839,000 Mcf of natural gas. With plans to soon expand its current reserve report to account for a 25% interest in a new 2,000-acre natural gas field in Pawnee County, Oklahoma, the market appears to be quite optimistic regarding Pinnacle’s future production prospects.

City Loan Inc: Flourishing in a Troubled Economy

A new corporate profile on City Loan, Inc. (OTCBB: CYLN) will soon be available at www.microstockprofit.com. I strongly suggest taking a look as the company employs a rather unique business model that is proving its ability to thrive in a down market. While the stock has struggled recently, I’m pretty confident that the company’s improving financials will translate into gains for investors down the road.

Although some may turn their nose up to the company’s bread and butter – high interest auto title loans – the strategy is proving to be quite lucrative. Despite the stock now trading at the low end of its 52-week range, business has never been better at CYLN. This was exemplified by recently reported record financial results that were highlighted by record quarterly revenues of $1.5M and net income of $177K.

The company provides investors with a multitude of compelling reasons to take a deeper look into its operations. Some of these include:

(1) CYLN employs a business model designed to capitalize on a “bad times” industry  which allows the company to benefit from a number of negative economic trends including: tightened credit markets, increased unemployment, and rising consumer debt;

(2) Anticipated 2008 un-audited revenue of $5.2M;

(3) Recently appointed CFO David Burke was Vice President of Citibank from 2004 to 2006 and Vice President of J.P. Morgan Chase & Co. from 2001 to 2003;

(4) Revenue of $1.3M for the quarter ending June 30, 2008, representing a 6% increase over the prior year period;

(5) Bad debt rate is less than one percent as credit card companies anticipate write-off rates of ten percent next quarter and the delinquency rate for one-to-four-unit residential properties reaches 6.41% at the end of Q2 2008;

(6) Employment of extremely profitable, yet potentially predatory business model that utilizes an introductory interest rate of 25%, which can mature into a triple digit APR if a loan is not paid back in full after 30 days; and

(7) The company aspires to increase exposure of its auto title loan product and keep overhead low through collaboration with the more than 13,000 non-bank financial service companies and 13,000 pawnshops throughout the U.S.

Net-Net

As the economy continues to flounder, why not take a closer look at two small caps proving their resilience to negative external trends and now trading at prices significantly lower than their logically attainable and surpassable 52-week highs?

With PENC showing promise for another green close on Tuesday and CYLN exhibiting potential for longer-term gains, I firmly believe that a few hours of research on both companies could pay off dearly in the future.

Pinnacle Energy, Inc. (OTCBB: PENC) continues to perform as expected. The stock price, as expected, has been bouncing nicely off lower support and is just a penny and a half off the upper boundaries of our ascending triangle formation.

We have reached our first traget of $1.20 (Tuesdays Post – “A break of that level (currently $1.20), look for $1.25 followed by $1.30 and new all-time highs.”) and are watching for the break of $1.20 as mentioned last week.

Pinnacle Energy (OTCBB: PENC) is reacting as expected. Coming off lower support, the stock is up nearly 10% in just a few days. As stated Tuesday evening, look for “A break of that level (currently $1.20), look for $1.25 followed by $1.30 and new all-time highs.”

Triangle patterns are some if the most reliable (head and shoulders are the most reliable) in the technical analysis world. Barring any more economic or political earthquakes, we should be well above $1.40 by years end.