MicroStockProfit » penny stock

Could SNSS be the next hot pharma company?

Editor — Thu, 15 Apr 2010 12:58:33 +0000

I am not a pharma expert, but I do dabble in it. I probably should become one. Pharma stocks seem to dominate the boards at times. I think the company, Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS) should be on your pharma radar. It is a penny stock now, but they have grand plans.

Let’s talk about the bad stuff first:

** SNSS has received a delisting notice from Nasdaq for not maintaining the magic $1 trading level.
** They recently issued their latest Q and it shows that they spend money like drunken sailors. Net loss was $4.0 million for the fourth quarter of 2009 and $40.2 million year ended December 31, 2009. Nearly $20 million of that loss was non-cash, but SNSS still burns cash like crazy.
** The company needs money to survive. With only $4 million in the bank, they need to raise capital…..which could be dilutive and devaluing.

Now, let’s talk about the good stuff:

** SNSS, which focuses on treatment of solid and hematological cancers, has a very promising drug candidate in the treatment of AML, a virulent and vicious form of leukemia. I have read where that market alone is almost a billion dollars annually. SNSS, which would have no direct competition in that niche, is proceeding on an FDA approval. So far, I have seen no hiccups on their march towards approval. That drug alone could push SNSS, on a valuation basis, to over 5. Pure hype and excitement from any news related FDA approval news could push the stock to a double or a triple in the matter of days.
** Clean balance sheet – Even though it is not strong, SNSS has no debt and has a “clean” BS.
** Volatility – This can be a good stock to trade. It has had some high volatility historically. With the need to keep their Nasdaq listing intact, expect them to pull “a few rabbits out of their hats” which could drive the stock up. With some news, they could be one of the penny stock darlings on the boards again.

I think that SNSS has some real home-run potential. They have a few problems at present, but management seems to be able to effectively navigate the shoals in the pharma world.

Here is their chart (with my annotations) so you can see that the chart is also favorable:

I think that SNSS should be on your trading radar. The progress the company has made on its blockbuster AML drug will make raising capital easy imo. I am not on the inside and am speculating, but I think that SNSS has a bright future. It won’t be a penny stock a year from now.

Have a great trading day!

Jeffrey Dean, Editor

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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 MicroStockProfit.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.

When will Generex Biotechnology (GNBT) stop falling?

Editor — Wed, 14 Apr 2010 13:32:25 +0000

GNBT has been around forever in the pennystock world. It has been touted as the next Nasdaq stock (or a piece of crap that is going to zero) in the time that I have been watching it.

It definitely isn’t going to zero, but right now traders and investors are down on GNBT…..for good reason.

Generex Biotechnology Corporation (GNBT) is a biotechnology company that is working on variations of its drug delivery systems for diabetes (and other illnesses). Here is a link to their site if you want to do more DD.

GNBT has been trading in a range between $0.40 and $0.70 for the last 6 months. Right now, it is trading at the bottom of that range.

I am not recommending that anyone “catch the falling knife” on this one, but I am thinking that GNBT is prime for a reversal. For all of the negative press that GNBT has been receiving, the news that they have received a financing commitment is a positive indicator. True, the financing is at a discount to GNBT’s current trading price. But, the commitment is real and they have already drawn the first tranche. It is composed of 24 tranches. The financing guys are not stupid. They want to be able to limit their exposure if things get worse for the company.

The negative press stems from the ever-irascible Adam Feuerstein of TheStreet.com, who called out GNBT and labeled them frauds. The company responded with a $250 Million defamation suit. I like MIchael Fizhugh’s article on SeekingAlpha.com about the whole mess. Read it here.

The Chart

Clearly, GNBT is in a downtrend. But, there is hope for a recovery. In the last 5 trading days, there has been 3 high volume selling days BUT there have been two up days. All the news is not bad. It looks like buyers are trying to bid up the stock. The oversold stochastics will exert some pressure for a bounce, but with the MACD still bearish, the stock could continue to fall for a while yet.

Watch for the MACD histogram to indicate that the bearish trend intensity is lessening. Another indicator that I am using lately is On Balance Volume (OBV). That indicator is telling me that the stock is still in distribution.

I am not qualified to pass judgment of GNBT’s drug portfolio. I look at anecdotal information to give me some idea of whether this stock has a chance. The financing is a huge indicator to me that GNBT will be around a bit longer. The company has plenty of cash, low debt, great ratios….that will help them see this “crisis” through. Any good FDA news and this stock will fly….Bad and the reverse will happen.

GNBT’s volatility is a great thing for short-term traders like us.

Trade with confidence,

Jeffrey Dean, Editor

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Time to take a look at Netlist (NLST)?

Editor — Tue, 30 Mar 2010 13:10:02 +0000

Netlist, Inc. (NLST) was one of the great stock success stories of 2009. The stock limped along at around 60 cents for much of 2009, but then caught fire and zoomed to $8.00 per share in the magical month of November. With the news of the impending release of their “game-changing” memory module, they took the market by storm. The product allows the server to believe it has more main memory than it is supposed to and is expected to put them in direct competition with Cisco (CSCO) and with a competitive advantage.

Since its almost 900% gain in November, things have been pretty quiet for NLST. In fact, the overall trend of the stock has been down. The company itself is still strong. NLST is still posting losses, but the gap is narrowing. Its balance sheet shows a great deal of cash, no debt and strong liquidity ratios.

The chart is where I want to focus your attention on.

Since I am a short-term trader, I don’t expect to be around in this stock very long. Short-term, it might be setting itself up for a bounce. There are a great number of people that are trapped in it at higher prices who will be selling into any strength. That is why (absent any news) any rally will be short-lived IMO.

Have fun and trade well,

Jeffrey Dean, Editor

Is ChinaTel (CHTL) ready for its closeup?

Editor — Fri, 12 Mar 2010 21:16:39 +0000

Stock screens are only indicators of trend. They don’t speak about a company’s potential, its challenges and its future. But, for those of us who are technical analysts, they do tell a story. A story that, if you read it right 70% of the time, will make you very rich.

On my daily stock screens today, I came across a chart I liked. Once I did my research, I found that I liked the company very much, too.

ChinaTel Group, Inc. (CHTL)

Like a lot of China penny stocks, it is incredibly volatile. Lately, they have been on a pronounced downtrend. Talking with their IR people, they surmised that investors were unhappy with the about their March 5th PR concerning amendments to stock purchase agreements for some major holders and a disappointing capital raise. Investors/traders were expecting a great deal more money…and, ChinaTel needs it.

They are setting up wireless broadband telecommunications networks throughout certain regions of The People’s Republic of China. Their first installations are in China with grand plans later of expanding to other countries such as Argentina and Peru. Their plan is to leverage WIMAX technology to emerging markets.

Revenues are miniscule compared to expenses (hence the need to constantly raise capital). But, I am not looking at CHTL as a fundamentals trade (because they stink anyway). This play is about riding the ups and downs of a stock that is sure to have many in the next several months.

Right now looks like a good time to get in with the expectation that the trend will reverse soon.

Here is the chart with my annotations:

Investors are entitled to be unhappy in the short term….CHTL needs more money and every capital raise dilutes us poor retail investors. However, it appears that the company is the “real deal” and will be around for the long term.

I would not be a long-term investor in CHTL just yet, but playing the volatility is fine. I never call bottoms and I won’t in this case. If the current support proves to be durable, I think that CHTL could return some nice gains for the nimble investor.

Trade with your eyes open,

Jeffrey Dean, Editor

I am betting the luster comes back to Yamana Gold (AUY)

Editor — Wed, 10 Mar 2010 15:53:01 +0000

Yamana Gold, Inc. (AUY) is still reeling from the beating it took from the Street and the financial press for its last Quarter/last year’s performance. AUY missed every meaningful benchmark (revenues, cost per ton, production volumes, etc…) and those misses are compounded by the stagnant gold prices recently. To say that AUY “missed” those benchmarks is not to say that the company is in any trouble. It is still profitable and has a strong balance sheet, but the market is looking for AUY to continue to be a low-cost producer and for growth.

BUT (and, that is a BIG but), AUY might be a great chart play. It is showing that it could bounce off of near-term support and deliver a short-term gain to savvy traders.

Here is the chart with my annotations:

“Is the bad news burned into the stock price” is the simple question that traders should ask themselves. I think that it might be. Historically, AUY has had great elasticity and bounced off of oversold levels and returned some nice gains. If you were to do a year chart on AUY, you would see what I am talking about.

AUY could be a nice short-term trade. Any breaks below support and the stock should be avoided until it can build a new base…or it can issue some better news.

Stock Scan for Thursday – IsoRay, Inc. (ISR)

Editor — Thu, 04 Mar 2010 14:37:56 +0000

Here is a little info on IsoRay, Inc. (ISR) from their site:

IsoRay, Inc. engages in the development, manufacture, and sale of isotope-based medical products and devices for the treatment of cancer and other malignant diseases in the United States and internationally.

I like the chart setup….It looks like it may have a short term bounce in it.

** Consolidating at current levels

** Support at $1.00

** Stochastics are entering oversold status

** MACD is still bullish with no trend

A quick glance

A quick glance at the financials and I was impressed. The company has revenues (but still posting losses). It has a clean balance sheet with cash and no debt. I think the downside is low with this one.

Good luck and good trading,

Jeffrey Dean

Stock Scan for the Day: GLUU

Editor — Tue, 02 Mar 2010 16:34:55 +0000

I was doing my scans this morning and came across GLU Mobile, Inc. (GLUU).

Simple company to understand: Glu Mobile Inc. designs, markets, and sells games for mobile phones worldwide.

Here is a few places for your DD: Yahoo! Finance and company site

The Chart

** Indicators are turning positive finally
** MACD bearish momentum is finally slowing and could reverse
** Volume has slowed and selling pressure appears to be easing
** Stochastics are oversold. If MACD continues to strengthen, a bounce could be possible

Do your own DD, but I like this chart for future gains. Co. outlook has gotten it hammered, but the company is still bullish on its prospects.

Jeffrey Dean

Editor

Golden Small Cap: AGT

Admin — Tue, 01 Sep 2009 15:45:29 +0000

Natural resource plays are very popular in the small cap stock universe. I have made good money on betting short-term on several of these resource plays. What typifies them is that they have no revenues, no income, a very weak balance sheet, but GREAT PROSPECTS. In one of my dumber trades of 2009, I chased the bid on BRZM and now I hold 10,000 shares of “crap”.

Today’s blog is about a resource play with a difference. It actually has revenues, income and assets on the balance sheet. It is a producing gold company, a so-called “junior miner”. AGT is one of a group of “junior miners” that include Claude Resources (CGR) and U.S. Gold (UXG). None of them are on par with the Newmont Mining’s (NEM) and Barrick Gold (ABX) of this world, but that is their ultimate goal. And with NEM and ABX trading at $40 and $35 respectively, they offer a gold play for small cap traders. With a spot price of $957 and persistent predictions of gold prices above $1,000, gold producers might be a good bet going forward.

I looked at the chart of all three “junior miners” and thought that AGT looked the best. It has been beaten down, but has some positives going forward. They have recently raised capital, they have had some profitable quarters in the past year (very volatile though) and they have some interesting gold properties in their portfolio. The chart indicates to me that the stock is approaching oversold status and may be in line for a bounce. It is also a stock that once you put it on your watch list, check it every day for the next two weeks. It may fall more (the 52-week low is 10 cents), but it is at a support level here at 38 cents.

Volume is off today and the stock is trading at the bottom of the Bollinger Bands. It is trading above its 200-day MA and below the 50-day. The MACD is bearish, but the histogram indicates that it is slowing. Lots of indicators are telling me that this stock that should be watched. Since it is off from its last three months highs, I would put a trailing stop on this to protect your profits.

Good luck and Good profit

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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.

Hard to get a read on HTDS

Editor — Tue, 25 Aug 2009 06:11:58 +0000

Hard To Treat Diseases, Inc. is a hard company to get a read on…as my title indicates. It is in the Pharma business, but not really much of a player. They have operations in Serbia and China under two separate operating divisions and appear to have a “story to tell”. .

In China they operate through Shenzhen Mellow Hope Pharm Industrial Co Ltd.. According to the company, Mellow Hope is the biggest exporter of Biological Vaccines in China. HTDS purchased Mellow Hope in February of this year in an all-stock transaction. It appears that the company has a viable product line and an active global client base. Here is a link to the Mellow Hope web site that makes for interesting reading.

In Serbia, they have a controlling interest in a company called Slavica Bio Chem Company. Their primary focus involves the enhancement and modification of existing approved drugs such as “Virazole” for the purpose of chemical repair of damage to the CNS (central nervous system), MS (Multiple Sclerosis), SARS, Hepatitis C and HIV. Here is the link to Slavica’s web site.

HTDS has garnered a huge amount of attention on the boards and as a stock to trade. Here is the chart:

The chart is not really compelling and tends to indicate that the stock is “taking a breather”. The MACD, while above the zero line, is indicating bearishness. The stock is under distribution and is being sold (profits takers, anyone?). Volume has dropped off lately and indicates that the stock is out of favor right now. Let’s put my last statement in perspective, though. The stock still traded 196 Million shares yesterday, off significantly from its 3-month average. What is amazing is that the trading activity of this magnitude is occurring with only 1,072,581,000 in the float (as of Mar 30, 2009). The thing to keep in mind is that this is a penny stock play and subject to all the manipulation and pumping of any penny.

What I find compelling is that HTDS has done some very astute things (acquisition of Mellow Hope) and appears to be very cost efficient in searching for new products. I will be very interested to see what kind of numbers Mellow Hope can produce for the company going forward. The Serbian operation holds out great hope for the company, too. It is working on modifications to a number of existing drugs to treat some of the more “popular” diseases of today’s society. Working with existing drugs also means that the dreaded FDA turndown is less likely and drugs can be brought to market quicker.

I could see this company retesting its recent highs of last week (21.9 cents) and pushing into new territory. Their is no resistance above 21.9 cents and limited resistance between 11 cents and 21.9 cents. The stock rebounded 29.41% today and may retract a little today, but I think the direction for the stock is up. Look for the right entry point and make sure you have a tight stop on it.

I believe that HTDS has the right formula for traders and investors.

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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.

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