Tag Archives: Penny Stocks

Penny Stocks – A Simple Definition for Beginners

Essentially, a penny stock is one that trades for pennies. It can be an extremely volatile market, as investors expect a large return for a small amount of input. These types of stocks lack liquidity, have limited following and disclosure, small capitalization and also have large bid-ask spreads. However if you do it right, you can reap the rewards and they tend to be traded over the counter, using pink sheets and OTCBB. Penny stocks are usually traded outside of the major market exchanges, due to the small amounts that they trade with and it takes a lot of research and education in the subject to really become knowledgeable about them.

In some countries, penny stocks are also known as cent stock. While there is really no definition of the penny stock that is accepted all over the world, the definition above is pretty standard. Many people put money into penny stocks, as well as other opportunities such as Bullion Vault. With any investment opportunity, it is important to make sure that you have as many facts as possible before making a decision. If you get it right, there can be good rewards, however it is definitely worth making sure that the opposite does not happen.

The OTCBB, or the OTC Bulletin Board provides over-the-counter equity securities and services to their members. To become a member, you must subscribe and then you can enjoy all the benefits that will be available to you. The equity securities that the OTCBB provides, are not available on the NASDAQ or national stock exchange, so are therefore unique to subscribing customers. Penny stocks tend to have limited listing requirements and not very many regulatory and fulling standards. They usually belong to small companies with speculative shares that are not liquid.

Pennyheaven Super 7 (2010)

Once again, our main criterion is growth: earnings, sales, and/or revenues must be increasing. The second criterion is profitability. All companies listed are currently profitable. Prices reflect close of business 12/31/09. Best of Luck!

1) Brekford Corp  BFDI (.15)
57,815,513 shares outstanding (s/o) as of 11/2/09
$1.06m cash; 86k debt
9-month sales up 16%
9-month net earnings (+ .01) v (- .03)
Market Cap – $8.67m

Brekford Corp. is a leading homeland technology service provider of fully integrated vehicle installation and rugged technology solutions geared towards mission critical operations. For more than a decade, the company has provided services to branches of the U.S. military, various federal entities and numerous security and public safety agencies. Brekford provides these agencies with an end-to-end suite of mobile products and services designed to streamline procurement and operations.

Brekford 360 Degree vehicle solutions provides complete vehicle upfitting, mobile data and video solutions including municipal financing and leasing services for agencies. The 360 Degree vehicle solutions approach provides customers with a one stop upfitting, cutting edge technology and installation service.

For more Company information, please see website: http://www.brekford.com

2) Biostar Pharmaceuticals, Inc.  BSPM (4.45)
23,240,899 s/o as of 11/10/09
$2.45m cash; 0 debt
9-month net sales up 52%
9-month net earnings (+ .37) v (+ .18)
Market Cap – $103.43m

Biostar Pharmaceuticals, Inc., through its wholly-owned subsidiary in China, develops, manufactures and markets pharmaceutical and medical nutrient products for a variety of diseases and conditions. The Company’s most popular product is its Xin Ao Xing Oleanolic Acid Capsule, an over-the-counter (“OTC”) medicine for chronic hepatitis B, a disease affecting approximately 10% of the Chinese population. In addition to its hepatitis product, Biostar manufactures two broad-based OTC products, two prescription-based pharmaceuticals and thirteen nutrients. The Company has adopted international standards and is in the process of applying for two patents.

3) Destiny Media Technologies  DSNY (.49)
52,059,647 s/o as of 11/26/09
$253k cash, 68k debt
Net income 2009 (+ .01) v (- .05) (2008)
Market Cap – $27.59m

From 10-K (11/30/2009)
Revenue continued to grow during our fourth quarter and was the highest in the Company’s history. Fourth quarter revenue was 77% higher than the same quarter in the prior year and more than 31% above the previous quarter in fiscal 2009. Total revenue for the quarter is $872,569 (third quarter fiscal 2009 – $665,829). Total revenue for the year was $2,560,447 (2008 – $1,578,888), an increase of approximately 62% over the fiscal 2008 year.

Destiny Media (http://www.dsny.com) is the developer of the Play MPE® system (http://www.plaympe.com) which the recording industry uses to securely distribute new pre-release music through the internet to trusted recipients such as radio, media and VIP’s. Real time usage statistics are available at http://www.plaympe.com/v4/company/plaympestats.php

4) Stellar Pharmaceuticals Inc  SLXCF (.98)
23,495,040 s/o as of 9/30/09
$1.91m cash; minimal debt
9-month net revenues up 61%
9-month net earnings (+ .01) v. (- .01)
Market Cap – $23.03m

Stellar Pharmaceuticals Inc has developed and is marketing direct in Canada and in countries around the world through out-license agreements two products based on its core polysaccharide technology: NeoVisc, for the treatment of osteoarthritis; and Uracyst, its patented technology for treatment of interstitial cystitis/painful bladder syndrome, an inflammatory disease of the urinary bladder wall. Stellar also has in-licensing agreement for the distribution and sale of NMP22 BladderChek, a proteomics-based diagnostic test for the diagnosis and monitoring of bladder cancer.

5) Superclick, Inc SPCK (.115)
45,312,251 s/o as of 8/31/09
$1.9m cash; 52k debt
9-month net revenue up 16%
9-month net (+ . 02) v. (+ .01)
Record quarterly revenues for the third quarter ending July 31, 2009
Market Cap – $5.21m

Superclick, Inc. through its wholly owned, Montreal-based subsidiary Superclick Networks, Inc., develops, manufactures, markets and supports the Superclick Internet Management System (SIMS(TM)), Monitoring and Management Application (MAMA(TM)) and Media Distribution System (MDS(TM)) in worldwide hospitality, conference center and event, multi-tenant unit (MTU) and university markets. Current clients include MTU residences and Candlewood Suites, Crowne Plaza, Fairmont Hotels and Resorts, Four Seasons Hotels and Resorts, Four Points by Sheraton, InterContinental Hotels Group PLC, Hilton, Holiday Inn, Holiday Inn Express, Hampton Inn, Mandarin Oriental Hotel Group Marriott, Novotel, Radisson, Sheraton, Westin and Wyndham hotels in Canada, the Caribbean and the United States.
Website: http://www.superclick.com/

6) Technical Communications TCCO (4.10)
1.47m s/o
5.42m cash; 0 debt
Market Cap – $6.02m

For the year ended September 26, 2009, the Company reported revenue of $7,752,000 and net income of $943,000, or $0.65 per share, as compared to revenue of $6,852,000 and net income of $1,061,000, or $0.75 per share, for fiscal 2008. For the quarter ended September 26, 2009, the Company reported net income of $235,000, or $0.16 per share, on revenue of $1,765,000, as compared to a net loss of $(87,000), or $(0.06) per share, on revenue of $1,204,000 for the quarter ended September 27, 2008.

TCC designs, manufactures, and supports superior grade secure communications systems that protect highly sensitive information transmitted over a wide range of data, voice and fax networks. TCC’s security solutions protect information privacy on every continent in over 110 countries. Government agencies, militaries, financial institutions, telecommunications carriers and multinational corporations worldwide rely on TCC to protect their communications networks.

Web Site: http://www.tccsecure.com

7) Tikcro Technologies TIKRF (.92)
~ 8.42m s/o
$7.4m cash; 0 debt
Market Cap – $7.75m

Tikcro Technologies Reports 2009 Third Quarter Results

Net income for the third quarter was $590,000 or $0.07 per diluted share. Net income for the nine months ended September 30, 2009 was $4.7 million or $0.56 per diluted share. Results for the third quarter included financial income of $692,000 primarily from to the valuation of Tikcro’s holdings in BioCancell Therapeutics, Inc., a clinical-stage biopharmaceutical company operating in the area of cancer treatment. Tikcro holds 36% of BioCancell, taking into account the conversion of a convertible note and exercise of warrants, and 27% on a fully diluted basis. Shares of BioCancell are traded on the Tel Aviv Stock Exchange.

Tikcro Technologies has holdings in BioCancell Therapeutics, Inc., a clinical-stage biopharmaceutical company operating in the area of cancer treatment. BioCancell is conducting the following clinical trials in Israel and in the U.S. using its leading drug, BC-819:  – Phase IIb clinical trial for the treatment of superficial bladder carcinoma   cancer – Phase I/IIa clinical trial for the treatment of ovarian cancer – Phase I/IIa clinical trial for the treatment of pancreatic cancer.

Please be advised that nothing within this notice shall constitute a solicitation or an offer to buy or sell any security mentioned herein. All statements made are our express opinion only and should be treated as such. Nothing within this notice should be considered personalized investment advice. Pennyheaven.com is neither a registered investment advisor nor affiliated with any broker or dealer. Any investments in stocks recommended in this notice should be made only after consulting with your investment advisor and only after reviewing the financial statements of the company. We reserve the right to trade in and out of these stocks at will, before, during, and/or after publication. We have not been compensated by any individual or company and we do not accept any paid promotion. Please do your own DD and trade only what is right for you.

9 Top China Plays

By Glen Bradford, GlenBradford.com

The financial crisis has sent the markets plummeting. For those who believe that companies that make more money than other companies should be priced higher than other companies, boy do I have some bargain bin deals for you. In the past 6 months, I’ve hand sorted through over 5000 companies. The steals are all in China.

1) China Architectural Engineering (NASDAQ: CAEI) specializes in high-end curtain wall systems (including glass, stone and metal curtain walls), roofing systems, steel construction systems, eco-energy saving building conservation systems and related products, for public works and commercial real estate projects.

The company just got added to the Halter USX China Index.

Trading at $37.24M with a book value of $78.2M for a company that does specialty construction projects looks like a steal, especially when they made $22.6M in the first 9 quarters of 2008.

They lowered their guidance for Q4/2008 and they are eating some cost overruns. Recent news includes that they were awarded two new contracts for projects valued at $80 million in Dubai and Singapore.

The company also reported that its project backlog has increased to a new record of $245M.

2) China Yongxin Pharmaceuticals (OTC BB: CYXN) has three segments: the wholesale of pharmaceuticals and other medical-related products, the operation of retail drugstores, and the cultivation, processing of ginseng.

Currently trading at $2.19M when they made $4.0M in the first 3 quarters of 2008 and $2.6M in the first 3 quarters of 2007 is absurd. Not to mention that the book value is $12.5M.

Yongxin also just put up a new, more flashy website. The investor message boards were very concerned when their old website went down. I sat by and let the people who don’t understand website development sell out. Same thing happened with New Dragon Asia (NWD) below.

3) New Dragon Asia (OTC BB: NWD) is engaged in the milling, sale and distribution of flour and related products, including instant noodles and soybean-derived products, to retail and wholesale customers throughout China. I find trading at $9.14M with a book value of $74M mildly entertaining. The company made $14.12M in 2008.

In my opinion, investors are shaky because their operating margins got squeezed by the ridiculous expansion in commodity prices. Good news, the whole bubble collapsed. As I see it, this is an opportunity for the company to make some huge numbers in 2009, not to mention that they’ve been religious about growing revenues over the past 5 years with high predictability.

Their website crashed about a month ago and the stock price hit the chopping block, getting cut by more than half. Look for the catalyst at $0.83 of the Halter USX China Index.

4) Gold Horse International (OTC BB: GHII) is principally engaged in three business sectors in China: construction, residential and commercial real estate development, and management and operation of the Inner Mongolia Jin Ma Hotel.

Top line revenue guidance for 2009 is $90M and the company is priced at $2.63M.

In 2008, they made $4.53M on revenues of $66.91M. The book value is about $25M. Gold Horse is located in Hohhot, China; a city that has been growing at 23.5% for the past 7 years.

Gold Horse has contracted to build a wind power manufacturing plant. This company is located in the middle of china, not on the outskirts where the exports have fallen and hurt the economy.

There are two issues that I see. The first is that their cash is low and they are burning through cash to maintain operations. The second is that there are some big shareholders that look to be slowly selling the stock down.

5) Orsus Xelent Technologies (AMEX: ORS) is engaged in the business of designing, manufacturing and distributing cellular phones for retail and wholesale distribution.

What we have here is a company trading at $7.44M that has a book value of $42.4M. In the last 9 months they made $6.34M.

According to their annuals, they are trying to advance along with technology into the 3G markets and are targeting China’s rural population. They grew 16% in 2008 even with the economic crisis slowing them down in the end of the year.

6) Lotus Pharmaceuticals (OTC BB: LTUS) manufactures branded drugs and distributes them along with products produced by third-party manufacturers throughout China. Lotus also just came out with a new website in the last week.

Trading at $8.06M with a book value of $38.3M and making $6.3M in the first 9-months of 2008 makes Lotus extremely attractive. There is downside for the risk-averse. Lotus East has historically funded its capital expenditures from their working capital and has advised us that they believe this capital is sufficient for their current needs.

Lotus East has contractual commitments for approximately $65.5 million related to a Technology Transfer Agreement and the construction of the new manufacturing facility. If Lotus East is not successful in obtaining all of the funding necessary to complete the construction of the new facility, it would lose the approximately $17,219,000 spent to date, including the $17,000,000 for the deposit on the land use rights which is non-refundable.

That said, it’s still trading below book value and has several huge projects in the works setting the stage for huge growth potential.

7) China Sun Group High Tech (OTC BB: CSGH) mainly engages in the production and sales of cobaltosic oxide and lithium cobalt oxide, both anode materials used in lithium ion rechargeable batteries in the People’s Republic of China.

Trading at $12.29M with a book value of $27.45M with a 2008 annual net income of $6.74M, I immediately started digging deeper into the growth potential of this company. Not to mention that every quarter in 2008 trounced the comparable quarter in 2007.

I don’t really mind reading headlines like: Quarterly Revenue Up 42% to $7.6 Million; Net Income Increases 145% to $1.8 Million. You can’t find headlines like those with your average run of the mill blue chip.

8.  Asia Cork (OTC BB: AKRK) is a rapidly growing leader in the development, manufacturing and marketing of cork-based building materials.

Asia Cork is currently valued at $4.64M, even though it has a book value of $17.1M and pulled down $2.54M of profit in the first 3 Quarters of 2008.

In my conversations with flooring experts, Cork seems to be trending back into fashion as a “green” alternative.

Another set of great headlines: Asia Cork Q3 ’08 Revenue Up 117% to $8.96M; Net Income Up 220% to $1.40M.

The issue here is the daily volumes are low and Asia Cork isn’t off it’s 52-week high as much as I’d like it to be.

9) China Kangtai Cactus Bio-Tech (OTC BB:CKGT) is principally engaged in the production, research and development (R&D), sales and marketing of products derived from cacti.

Again, I see a big deal here since the company is trading at $3.93M with a book value of $22.69M and a yearly net income of $2.1M including a -1.09M adjustment in Q1 2008.

The downside is that there are rumors that the market maker, NITE, has a lot of excess shares.

For the three months ended September 30, 2008, revenues increased by $2,229,213 or 56.4% to $6,184,685 from $3,955,472 in the corresponding period of the prior year. The increase in revenues was attributable to the fact that the company is continuing to expand its productions and distribution, and its products are better accepted by the Chinese market customers.

Bottom Line: In an environment like this, where game theory is prevailing, there’s no question in my mind that a lot of these companies are likely to become more attractive in the short term. The long term tradeoffs and value price tradeoffs warrant further investigation. Price is what you pay and value is what you get.

Disclaimer: I own NWD, GHII, CAEI, ORS, and LTUS in my accounts and the accounts I manage. I am working around Ameritrade to acquire exposure to CYXN and AKRK. I also plan on purchasing the other companies mentioned in this article.

Pennyheaven Super 7 (2008)

The main criterion is growth: earnings, sales, and/or revenues must be increasing. Then (in order) the following: no convertible debentures, OTCBB only, less than 50 million shares outstanding, less than $1.00. **

** Note: The final list strays beyond my original guidelines but not beyond their intention. By casting a wider net I have come up with extraordinary results…for the first time in Pennyheaven history every stock on the list is currently profitable.  Best of Luck!

Prices reflect close of business 12/31/07.

1) China VoIP & Digital Telecom, Inc.  CVDT  (.42)
52,958,000 shares outstanding (s/o) as of 11/14/07
800k cash; 266k debt.
9-month sales up 400%
9-month net earnings (+.02) v (.00)

China VoIP & Digital Telecom, Inc. offers Voice over the Internet Protocol service in People’s Republic of China through its wholly owned subsidiary Jinan Yinquan Technology Co., Ltd. Through Jinan Yinquan, China VoIP is well positioned to take full advantage of the tremendous economic growth currently being experienced in China. The Company is currently marketing its NP Soft Switch system in China and is currently in the testing stage of other Information Technology products.

2) Defense Industries International, Inc.  DFNS  (.27)
28,867,272 s/o as of 11/12/07
2.94m cash; minimal debt.
9-month net sales up almost 100%
9-month net earnings (+.04) v (+.01)

Defense Industries International, Inc. is a leading manufacturer and global provider of personal military and civilian protective equipment and supplies. Defense Industries’ main products include body armor, bomb disposal suits and bullet-resistant vests and jackets; ballistic wall covers, ceramic armor plates and lightweight armor UHMW-PE plates; personal military equipment, battle pouch units and combat harness units; dry storage units, liquid logistics, tents and vehicle covers; winter suits, sleeping bags and backpacks. The Company’s manufacturing facilities meet American EQNET and international ISO 9001 standards. The Company has three principal subsidiaries, Export Erez Ltd., Achidatex Nazareth Elite ltd. and Owen Mills in the USA. For additional information, please visit the Company’s web site at http://www.defense-industries.com/.

3) ForeverGreen Worldwide Corporation  FVRG  (1.28)
13,904,014 s/o as of 10/29/07
No cash; no debt.
9-month rev up 400%
9-month net earnings (+.02) v (-.15)

ForeverGreen Worldwide Corporation develops, manufactures and distributes an expansive line of all natural products to North America, Australia, Europe, and Asia. Offerings include FrequenSeaTM a whole-food beverage, 24 Karat Chocolate®, ForeverYoungTM Essential Oils, PulseTM, a whole-food snack or meal replacement and an entire catalog of meals, snacks, household cleaners and personal care products. Website: http://www.forevergreen.org/

4) Global Med Technologies  GLOB  (1.08)
26,303,593 s/o as of 11/26/07
5.7m cash, minimal debt.
Record Q3; 9-month rev up ~35%
9-month net income fully diluted (+.03) v (+.03)

Global Med Technologies®, Inc. is an international e-Health medical information technology company providing information management software products and services to the healthcare industry. Its Wyndgate Technologies® division is a leading supplier of information management systems to U.S. and international blood centers and hospital transfusion centers. Each year, Wyndgate’s products and services manage more than eight million blood components, representing over 27% of the U.S. blood supply. Wyndgate’s products are also being used in Canada and sub-Saharan Africa, and are being implemented in the Caribbean. Together, the Donor Doc(TM) interactive donor health history questionnaire, SafeTrace® donor management system, and the SafeTrace Tx® advanced transfusion management system, recently patented, provide Vein-to-Vein® tracking from donor collection to patient transfusion. For more information about Global Med’s products and services, please call 800-WYNDGATE or visit http://www.globalmedtech.com/, http://www.peoplemed.com/ and http://www.wyndgate.com/.

5) RBC Life Sciences  RBCL (.82)
20,425,244 s/o as of 10/31/07
5.26m cash; 2.5m debt.
Latest Q sales up 50%; 9-month net sales up almost 25%.
9-month net earnings (fully diluted) (+.07) v. (+.01)

RBC Life Sciences develops, manufactures and markets skin care products and food supplements providing nutrients often found to be low or missing in modern diets. All products are tested for quality assurance in-house, and by outside independent laboratories, to comply with regulations in the U.S. and in more than thirty countries in which the products are distributed. MPM Medical, a wholly owned subsidiary of RBC, develops and markets proprietary prescription and nonprescription products for wound and pain management, sold through medical-surgical dealers to nursing homes, hospitals and cancer clinics. Web Site: http://www.rbclifesciences.com/

6) Specialized Health Products International, Inc. SHPI (.87)
68,333,633 s/o as of 11/7/07
8m cash and securities; 0 debt.
9-month gross profit up almost 50%
9-month net earnings (+.03) v (.00)

Specialized Health Products International, Inc. is a leading developer, manufacturer and marketer of proprietary disposable medical products for clinician and patient safety. Specialized Health Products has developed multiple safety needle products based upon a broad intellectual property portfolio that applies to virtually all medical needles used today. Specialized Health Products is a market leader in safety Huber needles, with four complementary product offerings. The Company has licensed or supplies other products to leading global healthcare companies, including Covidien, Bard Access Systems, and BD Medical. For more information about Specialized Health Products, visit the Company’s website at http://www.shpi.com/.

7) Turbosonic Technologies, Inc.  TSTA  (.81)
15,130,054 s/o as of 9/30/07
2.5m cash; minimal debt.
2007 revenue up ~40%
2007 Net earnings (+.09) v (+.06)

TurboSonic Technologies (http://www.turbosonic.com/) designs and markets air pollution control technologies to industrial customers worldwide. Its products help companies in the Cement and Mineral Processing, Ethanol, Metals & Mining, Petrochemicals, Power Generation, Pulp & Paper, Waste Incineration, and Wood Products industries comfortably meet the strictest emissions regulations, improve performance and reduce operating costs.

Please be advised that nothing within this notice shall constitute a solicitation or an offer to buy or sell any security mentioned herein. All statements made are our express opinion only and should be treated as such. Nothing within this notice should be considered personalized investment advice. Pennyheaven.com is neither a registered investment advisor nor affiliated with any broker or dealer. Any investments in stocks recommended in this notice should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. We reserve the right to trade in and out of these stocks at will, before, during, and/or after publication. We have not been compensated by any individual or company and we do not accept any paid promotion. Please do your own DD and trade only what is right for you.