Penny Pick Elite
During the recession, while most investors were panicking as almost every stock was tanking…I was calmly sitting at my desk with a smile on my face.
You see, while everyone around me – colleagues, friends, neighbors – were losing their shirts, I was still making money.
But I wasn’t doing it with shares of Wal-Mart stock…or bonds…or CDs.
Instead, I was using one of the most misunderstood investment tactics in the world to rake in gains that 99% of investors sidestep on a daily basis.
In fact, this technique is so profitable that the U.S. government considered banning it all together.
For those of us who know about it and know how to use it properly, though, there’s literally no limit to how much money we can make.
In fact, over the course of my research, I’ve discovered a small ring of people who’ve used this technique successfully for years to amass millions upon millions of dollars…
This is the same technique that we use for our recommendations in Penny Pick Elite. Click the Penny Pick Elite logo on the left to become a member…
Penny Pick Elite
Getting A One-Two Trading Punch From xG Technology, Inc. (XGTI)
Every once in a while a company closes a deal that actually has the potential to transform its stock into a market winner. Combine that with an issue that has already experienced dizzying share price jumps in the past, but is hovering about 80% off of those lofty levels, then you may have a recipe for potential trading success.
Right now, the shares of xG Technology, Inc., trading on the Nasdaq under the symbol XGTI, may be preparing to parlay that one-two punch into some nice trading gains in the weeks ahead.
Founded in 2002, xG Technology, Inc. develops communications technologies for wireless networks worldwide. It primarily offers a portfolio of intellectual property to enhance wireless communications, embedded in proprietary software algorithms designed to offer cognitive interference mitigation and spectrum access solutions to organizations in a various industries, including national defense and rural broadband. The company sells its intellectual property and the equipment directly, as well as through an indirect channel network.
On Tuesday, XGTI announced it had been awarded a subcontractor position from the U.S. Army. The multiple-award contract, valued at $497 million, calls for xG to provide communications and network services over a five-year period. xG is teamed with primary contractor Science Applications International Corporation (SAIC) to carry out the project. Promisingly, SAIC has used xG Tech as a subcontractor in the past, suggesting that the company will continue to expand its partnership with xG on future projects.
Under the terms of the latest subcontract, xG Technology will provide research, development and evaluation in support of communications and networks systems under the five S&TCD Division technology areas including antennas, system engineering, satellite communication, cyber-security, and communications networks.
As always with deals of this nature, it’s impossible to immediately determine how much revenue will be coming xG Tech’s way. That’s because the contract amount is the ceiling the government contract authorizes, and also because xG will be working under the aegis of Science Applications Intl., a much larger player in the space.
That inherent uncertainty didn’t stop market participants from piling into XGTI shares in the wake of the news. The stock jumped out of the gate at the market open Tuesday, quickly ripping to an intraday top of $3.01 per share. Profit taking, however, along with news of a Syrian aerial attack in Iraq, caused both the market indexes and XGTI’s share price to contract considerably.
By the closing bell, the stock had slipped down to a final print of $2.31 per share—still good for an impressive 25% rally on the day. With the entire XGTI public float listed at about 15 million shares, trading volume on the day weighed in at 13 million shares, about 13x the issue’s daily churn rate over the past year.
As you can see from the chart above, XGTI shares have a track record of making quick runs north. In late May shares got an immediate boost after the company announced that it had been awarded a new patent for interference mitigation techniques.…
Taking Stock As the Second Half of the Trading Year Approaches
It’s once again time to look back at several of our recent picks, evaluate their performance, and speculate on their prospects going forward with the second half of the trading year right around the corner. In general, it’s been tough sledding for true penny plays, while several small cap issues we’ve highlighted have been charging ahead from our entry points — propelled in part by record bullishness in the Dow and S&P 500 indexes.
Selected as a potential breakout candidate less than a month ago, when the issue was trading at $2.54, this fracking-related infrastructure support company has performed beautifully — taking out our $3.25 target in less than four weeks, ultimately touching a new 52-week high of $3.29. Catalysts for this issue have included good earnings and higher open market oil prices.
Currently, ENSV shares are sitting at about $3.05 each, and I wouldn’t be surprised to see the stock sit in a $2.90 – $3.30 channel prior to the company’s next earnings release. There’s no reason to believe that more good times won’t keep rolling for Enservco’s earnings trend, however, which leads me to believe that this issue remains a solid buy and hold candidate. Company management will be ringing the closing bell of the New York Stock Exchange on June 20, which may be a symbol of even better things to come. I’m raising my price target to $3.50.
Telecommunication Systems (TSYS)
Recommended as a buy a little over one month ago at $3.07, after breaking through technical resistance at $3 on rising volume, this has proven to be a modestly successful trade. TSYS shares are currently sitting at about $3.25, after breaking up to a new 52-week top of $3.47 two weeks after our story appeared. At the time of that call, trading volume in TSYS was very much on the upswing, and the stock was grinding through price levels it hadn’t seen in about two years.
With trading volume waning recently, the issue appears stuck in consolidation mode, in anticipation of either an upside or downside catalyst. That will no doubt come when the company releases its next earnings statement and outlook. Until then, given the declining trading interest, I’d suggest taking the profit and closing this position.
Jammin Java (JAMN)
After flashing signs of a technical price surge higher in the wake of a company roadshow and several bullish deal-related announcements, the reality of earnings put a kibosh on the rally. Prior to the downbeat earnings news, headlined by a multi-million dollar loss on the year, JAMN shares had managed to quickly rip up to a break of $0.40, well above the trading price of $0.33 when our story first appeared.
In hindsight, the price jump appears to have been fueled by both the bullish news releases and anticipation of an improved bottom line. When those earnings disappointed, there was a great deal of speculative froth that turned the tide against the stock. Now battling to hold the line at $0.30, I would need to see some vast improvement in sales numbers to bet on this one again.…
Going Long with Stigma Labs
If you’ve ever bet on sporting events, then you probably know that professional handicappers look for strong trends to help determine winners and losers. In the stock market it’s no different—with the exception that uptrends in stock sectors are generally more reliable for generating profits than their sports counterparts. This year, it’s all about fuel cells and marijuana. Today, however, I want to revisit an under-the-radar play in one of last year’s strongest sectors—the 3D printing space.
While the pure momentum run in many large cap issues in the sector has cooled a bit (DDD, SSYS), there are a host of emerging plays related to the field that continue to attract marketplace attention, and appear to be true ground-floor opportunities in a rapidly expanding industry. One of the strongest, in my opinion, is Sigma Labs, Inc., currently trading over-the-counter under the symbol SGLB.
Based in Santa Fe, New Mexico, Sigma Labs, Inc. engages in the development and commercialization of manufacturing and materials technologies, and R&D solutions. It also focuses on commercializing technologies and products in various industry sectors, such as in process quality assurance for manufacturing; aerospace and defense manufacturing; additive manufacturing; active protection systems for defending light armored vehicles; advanced materials for munitions; advanced materials for sporting goods; advanced manufacturing technologies; and dental implant and biomedical prosthetics technologies. In addition, the company provides consulting services to the public and private sector, with regard to emerging technologies and alternative applications of established technologies for Federal government and commercial clients.
Sigma Lab’s ace-in-the-hole is its focus on developing advanced, real-time quality inspection systems for 3D metal printing and other technologies. Manufacturing integrity is key to the success of the 3D printing process, which presents unique quality-control challenges. Compared to traditional casting, welding, or machining manufacturing methods, additive manufacturing is slower and has its own issues with imperfections due to process variations. Any system that can minimize these quality issues will accelerate production, and that’s precisely what Sigma Labs’ PrintRite3D system is designed to do.
Unlike other micro-cap companies in the 3D space which are long on claims but short on real products or potential, Sigma is already doing business with manufacturing giant GE. GE has asked Sigma to develop its PrintRite3D system to the point where it will operate as a “closed loop”— feeding information back to the printer so it can make real time adjustments. GE’s key concern, and what Sigma Labs is best prepared to address, is unmelted metal powder entrapment in the additive manufacturing process.
Regarding the partnership, Christine Furstoss, Technical Director for Manufacturing and Materials Technologies at GE, stated “we have a joint technology development agreement with Sigma Labs Inc. to develop in-process inspection technologies of additive components with the goal of reducing production time up to 25 percent.” Currently, Sigma is the only company known to be working on this closed loop inspection technology, and their impressive array of patents protecting the process should make it difficult for other companies to compete any time soon.…
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