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| Friday September 2, 2011 After a handful of positive sessions on Wall street and a return to ease and calmness and rational interpretation of economic data recently, todays jobs report, or lack of jobs report, once again brought gloom and doom back into the spotlight. Any Wall street insider would tell you that the weak jobs report was already well priced into the market, and that it was the European debt crisis to blame for the 250 point DOW decline today. Considering this along with the fact that the economy actually added 45,000 jobs if we reconcile the Verizon strike, we can see that nothing has changed fundamentally for the last six months, slow and steady growth continues. Also, it's hard to imagine that the 5, 6 and 700 point drops in the DOW as well as a debt hostage showdown had nothing to do with the lack of hiring confidence in the month of August. Regardless of the nuance, we need to continue with a defensive stance, as the possibility of recession does loom and even if it occurs by means of a self-fulfilling prophecy, it will still be just as bad for business. In order to maintain our defensive stance and possibly strengthen it, we are doing two things. First of all, we will be keeping our somewhat low stop losses in place, but will not be lowering them any further. Also, having seen our profitable stop loss in NENE breached, we are taking the windfall profits from that trade and are adding them to our 'cash' position, so we will sit the week out with only eight current positions. FEED(NASDAQ) Buy: $1.05 Sell: $2.50 Stop Loss: $0.60 Date Added: 8/8/2011 Condition Updates: No Changes This Week Comments: FEED took a little bit of a hit earlier in the week when reports of a potential shareholder lawsuit hit the wires. All in all, the stock continues to hold up well and has found a pretty solid bottom. The private investigations are just that, private, and are pretty standard fare when a company comes out with horrible results and tanks by 40%. The only real mystery here is whether or not the law firms bringing said investigations are actually acting in the interest of shareholders. GLUU(NASDAQ) Buy: $5.25 Sell: $8.95 Stop Loss: $2.25 Date Added: 7/12/2011 Condition Updates: No Changes This Week Comments: GLUU has seen a bit of a bounce off its lows recently and has pretty much been trading along with the markets. Should the mobile gaming industry continue to heat up, GLUU could see some major upward pressure as the acquisition drum continues to beat louder and louder. There was no news or developments for GLUU this week. DENN(NASDAQ) Buy: $4.00 Sell: $8.00 Stop Loss: $2.85 Date Added: 3/17/2011 Condition Updates: No Changes This Week Comments: No news for Denny's this week as well, but we did see some new menu items hitting the airwaves. The stock has seem some increased volatility recently but still holds up well, and remains closer to it's fifty two week high that most peers. PLXT(NASDAQ) Buy: $3.85 Sell: $6.00 Stop Loss: $2.45 Date Added: 7/6/2010 Condition Updates: No Changes This Week Comments: PLXT continues to trend with the NASDAQ and it seems to be seeing some major volume increases and upward momentum every time it dips below $3.00. LVLT(NASDAQ) Buy: $2.50 Sell: $3.95 Stop Loss: $1.35 Date Added: 7/11/2011 Condition Updates: No Changes This Week Comments: Heavy activity continues for Level 3 as does some pretty positive commentary coming out of the blog-o-sphere. The company announced a couple of contract extensions but nothing major this week. Valuations have come down a bit from two months ago when the stock found it's fifty two week high and many are calling a bottom. ETAK(OTCBB) Buy: $3.00 Sell: $6.50 Stop Loss: $2.05 Date Added: 8/8/2011 Condition Updates: No Changes This Week Comments: On the heals of a decent quarterly report, ETAK has not seen any developments since August 23 when they announced the signing of an agreement with Your Card B.V., a Mobile Virtual Network Operator (MVNO) serving the Dutch market. The stock continues to hold up quite well and was a rare gainer today. AUGT(OTC BB) Buy: $3.50 Sell: $7.25 Stop Loss: $2.05 Date Added: 8/1/2011 Condition Updates: No Changes This Week Comments: This week, AUGT announced that it has completed the acquisition of substantially all of the assets and the business of Hipcricket, Inc., ("Hipcricket"), a mobile marketing and advertising company headquartered near Seattle, Washington. "We believe that the acquisition of Hipcricket will allow Augme to provide the most powerful best-of-breed mobile marketing and advertising solutions to global brand name leaders, backed by strong intellectual property portfolios that include patented technology and software-as-a-service ('SaaS') technology platforms," noted Paul Arena, Chief Executive Officer of Augme Technologies, Inc. "Additionally, Hipcricket's revenues for the twelve months ended July 31, 2011 approximated $9.4 million on which it earned a 67% gross profit margin." IWEB(OTCBB) Buy: $0.20 Sell: $0.50 Stop Loss: $0.12 Date Added: 2/7/2011 Condition Updates: No Changes This Week Comments: IWEB has seen a little bit of volatility and slightly increased trading activity over the past week. On Wednesday the company announced that the entire IceWEB product line of Unified Storage Platforms now ship with Hybrid Array technology which effectively adds substantial speed. Friday August 26, 2011 Although things seemed to have calmed down a bit on Wall Street this past week and stocks have returned to their slow and steady climb, it will be important to not become complacent. We are keeping our stop losses on the low side for now, as any number of things could cause another one or two day massive sell off. Overall, though, the general consensus has finally found some more rational footing. Slow growth with a slim chance of recession may be boring, but as stocks creep back up, confidence may return to the economy. Should things look similar next week, we would use the opportunity to raise our stop losses back up quite a bit and bring some safety back to this portfolio. Important note: In order to align our weekly portfolio update more closely with our weekly newsletter, we are moving the update to Friday's after the bell. This will allow a more consistent weekly reflection and a full weekend to consider strategy for the coming week. The next portfolio update will be issued on Friday, September 2, 2011, after the bell. FEED(NASDAQ) Buy: $1.05 Sell: $2.50 Stop Loss: $0.60 Date Added: 8/8/2011 Condition Updates: Stop Loss Lowered Comments: After plummeting on poor results just before the markets sank, Agfeed has actually been holding up better than most stocks during the volatility at around $1.00 per share. We will be looking for FEED to issue some guidance when they release their hard quarterly report. A recent shareholder vote doubled the companies authorized shares from 75 million to 150 million, but an issuance of 1 million preferred shares was not approved. GLUU(NASDAQ) Buy: $5.25 Sell: $8.95 Stop Loss: $2.25 Date Added: 7/12/2011 Condition Updates: Stop Loss Lowered Comments: After what was actually a decent quarterly report, market condition caused GLUU to sink fairly rapidly as earnings were not quite as good as expected. Then, the company picked a really bad time to dump over 10 million shares onto the market, or close to a 20% increase in the share count. This is why the stock has dipped so low in such a short period of time. Meanwhile, overall revenue for the mobile gaming industry is seen doubling next year. The cash infusion for the company may be more timely than we think, as it attempts to grow it's business at perhaps just the right time. Keep in mind that GLUU is still a relatively small company, even if it is one of the only games in town. DENN(NASDAQ) Buy: $4.00 Sell: $8.00 Stop Loss: $2.85 Date Added: 3/17/2011 Condition Updates: Stop Loss Lowered Comments: On the heals of a strong earnings report, Denny's saw some volatile trade and some positive action, but then fell victim to the overall selling pressure on Wall Street and economic fear. This could set the stock up well should the overall markets begin to trend back up, and we did see a small insider buy late last week. PLXT(NASDAQ) Buy: $3.85 Sell: $6.00 Stop Loss: $2.45 Date Added: 7/6/2010 Condition Updates: Stop Loss Lowered Comments: PLXT is trending with the NASDAQ and a strong recent quarterly report coupled with fairly light trade is keeping the stock from sinking further. The company recently announced full production availability of its TeraPHY® TN8000 10GBase-T transceiver family. LVLT(NASDAQ) Buy: $2.50 Sell: $3.95 Stop Loss: $1.35 Date Added: 7/11/2011 Condition Updates: Stop Loss Lowered Comments: LVLT continues to be one of the most actively traded issues on the NASDAQ. This may be an advantage should things turn around in the markets, remember, the NASDAQ has been beaten down more significantly than the DOW and S&P from a percentage standpoint. A very big decline in the stock recently also makes its valuations look a lot more reasonable. ETAK(OTCBB) Buy: $3.00 Sell: $6.50 Stop Loss: $2.05 Date Added: 8/8/2011 Condition Updates: Stop Loss Lowered Comments: Overall, ETAK's quarterly report was good and the stock saw a little bit of a pop. Income (Loss) was $(6,721,423) and $(14,358,524) for the three months ended June 30, 2011 and 2010 respectively, and $(11,434,647) and $(26,696,719) for the six months ended June 30, 2011 and 2010 respectively. NENE(OTCBB) Buy: $1.50 Sell: $2.95 Stop Loss: $2.25 Date Added: 7/11/2011 Condition Updates: Stop Loss Raised Comments: Although NENE's recent pop came on no news, we will take any kind of gain we can in this current environment. We are raising our stop loss for this issue to seal in some of the gain. This is the only issue in the portfolio that we are raising the stop loss for rather than lowering it this week. AUGT(OTC BB) Buy: $3.50 Sell: $7.25 Stop Loss: $2.05 Date Added: 8/1/2011 Condition Updates: Stop Loss Lowered Comments: AUGT has not seen any news or developments over the past couple of weeks and has simply trended right along with the major markets. We will continue to keep the stock on the back burner, as we watch continued growth in the bar code market. IWEB(OTCBB) Buy: $0.20 Sell: $0.50 Stop Loss: $0.12 Date Added: 2/7/2011 Condition Updates: Stop Loss Lowered Comments: IceWeb's quarterly report was encouraging, but perhaps not exactly what investors were hoping for. Due to the light activity in this stock, we are only adjusting the stop loss down slightly. For the three month period ending June 30, 2011 the Company reported a non-GAAP loss of $404,935 and a GAAP loss of $698,269, versus a non-GAAP and GAAP loss of $695,512 and $1,423,743, respectively, for the year-ago period. The improved net loss was attributable to significant cost-cutting measures undertaken by the company, in anticipation of the merger with Promark. Operating expenses for the quarter was $932,559, as compared to $1,867,094 in the year ago period, a decrease of 50%. On a non-GAAP basis operating expenses for the quarter was $639,225 versus $1,034,051 for the same period in the prior year. Monday August 22, 2011 Another negative week on Wall street puts stocks in a very precarious position. Equity losses are spurring less confidence in the economy, which in turn is creating pessimism about the relatively benign economic data that has been coming out. Fears of major defaults across Europe are certainly not helping the situation, but looking at the fundamental data by itself, things haven't really changed that much over the past year. Rationally thinking economists as a whole believe that the economy is not very likely to sink into another recession, and in fact see better overall growth for the second half of this year. We will continue to lower our stop losses in the portfolio to hopefully avoid being stopped out of the majority of our positions, perhaps at the worst time, right when stocks begin to rebound. There is definitely risk in doing this, but the risk of sealing losses and then creating new ones will be eliminated. Our confidence in all nine current portfolio positions remains strong, and we would be adding to positions on major pullbacks if possible. Important note: In order to align our weekly portfolio update more closely with our weekly newsletter, we are moving the update to Friday's after the bell. This will allow a more consistent weekly reflection and a full weekend to consider strategy for the coming week. The next portfolio update will be issued on Friday, August 26, 2011, after the bell. FEED(NASDAQ) Buy: $1.05 Sell: $2.50 Stop Loss: $0.60 Date Added: 8/8/2011 Condition Updates: Stop Loss Lowered Comments: After plummeting on poor results just before the markets sank, Agfeed has actually been holding up better than most stocks during the volatility at around $1.00 per share. We will be looking for FEED to issue some guidance when they release their hard quarterly report. A recent shareholder vote doubled the companies authorized shares from 75 million to 150 million, but an issuance of 1 million preferred shares was not approved. GLUU(NASDAQ) Buy: $5.25 Sell: $8.95 Stop Loss: $2.25 Date Added: 7/12/2011 Condition Updates: Stop Loss Lowered Comments: After what was actually a decent quarterly report, market condition caused GLUU to sink fairly rapidly as earnings were not quite as good as expected. Then, the company picked a really bad time to dump over 10 million shares onto the market, or close to a 20% increase in the share count. This is why the stock has dipped so low in such a short period of time. Meanwhile, overall revenue for the mobile gaming industry is seen doubling next year. The cash infusion for the company may be more timely than we think, as it attempts to grow it's business at perhaps just the right time. Keep in mind that GLUU is still a relatively small company, even if it is one of the only games in town. DENN(NASDAQ) Buy: $4.00 Sell: $8.00 Stop Loss: $2.85 Date Added: 3/17/2011 Condition Updates: Stop Loss Lowered Comments: On the heals of a strong earnings report, Denny's saw some volatile trade and some positive action, but then fell victim to the overall selling pressure on Wall Street and economic fear. This could set the stock up well should the overall markets begin to trend back up, and we did see a small insider buy late last week. PLXT(NASDAQ) Buy: $3.85 Sell: $6.00 Stop Loss: $2.45 Date Added: 7/6/2010 Condition Updates: Stop Loss Lowered Comments: PLXT is trending with the NASDAQ and a strong recent quarterly report coupled with fairly light trade is keeping the stock from sinking further. The company recently announced full production availability of its TeraPHY® TN8000 10GBase-T transceiver family. LVLT(NASDAQ) Buy: $2.50 Sell: $3.95 Stop Loss: $1.35 Date Added: 7/11/2011 Condition Updates: Stop Loss Lowered Comments: LVLT continues to be one of the most actively traded issues on the NASDAQ. This may be an advantage should things turn around in the markets, remember, the NASDAQ has been beaten down more significantly than the DOW and S&P from a percentage standpoint. A very big decline in the stock recently also makes its valuations look a lot more reasonable. ETAK(OTCBB) Buy: $3.00 Sell: $6.50 Stop Loss: $2.05 Date Added: 8/8/2011 Condition Updates: Stop Loss Lowered Comments: Overall, ETAK's quarterly report was good and the stock saw a little bit of a pop. Income (Loss) was $(6,721,423) and $(14,358,524) for the three months ended June 30, 2011 and 2010 respectively, and $(11,434,647) and $(26,696,719) for the six months ended June 30, 2011 and 2010 respectively. NENE(OTCBB) Buy: $1.50 Sell: $2.95 Stop Loss: $2.00 Date Added: 7/11/2011 Condition Updates: Stop Loss Raised Comments: Although NENE's recent pop came on no news, we will take any kind of gain we can in this current environment. We are raising our stop loss for this issue to seal in some of the gain. This is the only issue in the portfolio that we are raising the stop loss for rather than lowering it this week. AUGT(OTC BB) Buy: $3.50 Sell: $7.25 Stop Loss: $2.05 Date Added: 8/1/2011 Condition Updates: Stop Loss Lowered Comments: AUGT has not seen any news or developments over the past couple of weeks and has simply trended right along with the major markets. We will continue to keep the stock on the back burner, as we watch continued growth in the bar code market. IWEB(OTCBB) Buy: $0.20 Sell: $0.50 Stop Loss: $0.12 Date Added: 2/7/2011 Condition Updates: Stop Loss Lowered Comments: IceWeb's quarterly report was encouraging, but perhaps not exactly what investors were hoping for. Due to the light activity in this stock, we are only adjusting the stop loss down slightly. For the three month period ending June 30, 2011 the Company reported a non-GAAP loss of $404,935 and a GAAP loss of $698,269, versus a non-GAAP and GAAP loss of $695,512 and $1,423,743, respectively, for the year-ago period. The improved net loss was attributable to significant cost-cutting measures undertaken by the company, in anticipation of the merger with Promark. Operating expenses for the quarter was $932,559, as compared to $1,867,094 in the year ago period, a decrease of 50%. On a non-GAAP basis operating expenses for the quarter was $639,225 versus $1,034,051 for the same period in the prior year. Monday August 8, 2011 Only short sellers faired well last week on Wall Street, and as bad as the DOW performed losing 6.5%, the NASDAQ did even worse plummeting 9%. Both indices finished the week off exactly where they had started a month earlier. What is interesting is that fundamentally speaking, nothing has really changed, and a much better than expected jobs report did nothing to help the situation. The S&P Downgrade of U.S. debt will likely help the short sellers even further starting this week out, but once again, fundamentally speaking, nothing has changed. This completely irrational fear being spurred by the media and politicians should be your clue to buy, buy and buy some more. Looking at the portfolio, we can see that with the exception of DENN, things were just as bad last week, if not worse than the major markets. We were stopped out of two brand new positions, FEED and USU, almost literally the instant they were added to the portfolio. We are adding FEED right back to the portfolio at a significant discount to where it was stopped out at $1.45. Because of concerns with USU that we do not feel will be worked out soon, we are replacing that issue with a brand new one, . We are also lowering a few stop losses to try and ride out this storm the best we can, and are still leaving that tenth spot open as a cash position so we sift through all of the opportunities that will almost certainly present themselves this week. FEED(NASDAQ) Buy: $1.05 Sell: $2.50 Stop Loss: $0.65 Date Added: 8/8/2011 Condition Updates: Brand New Position Comments: As attractive as valuations for AgFeed industries looked a week ago when the stock was trading at $2.00, they now look absolutely unreal with a stock price closer to a dollar. After a completely miserable preliminary quarterly report hit the wires on Tuesday, the question now becomes 'Is the stock undervalued for a reason?' We'll explore that question a little bit and look at why the stock got hammered over the last three trading sessions and if it will make a comeback anytime soon. See our members exclusive article "Is AgFeed Industries Underfed?" GLUU(NASDAQ) Buy: $5.25 Sell: $8.95 Stop Loss: $2.95 Date Added: 7/12/2011 Condition Updates: Stop Loss Lowered Comments: Glu Mobile did beat expectations last week when they reported quarterly earnings, but just was not enough to send the stock higher amid the worst week for the NASDAQ in over two years. The company reported a second-quarter loss of $1.75 million, or 3 cents a share, compared with a loss of $3.22 million, or 10 cents a share, for the year-earlier period. Revenue was $17.68 million, up from $15.95 million. Adjusted loss was 1 cent a share. Analysts had expected the company to report a loss of 4 cents a share, on revenue of $16.45 million. They also announced two new acquisitions and a new presence in the Google Chrome web store. We have lowered our stop loss a bit to allow for another overall market crash but would be very surprised to see the stock get near that level. DENN(NASDAQ) Buy: $4.00 Sell: $8.00 Stop Loss: $3.25 Date Added: 3/17/2011 Condition Updates: No Changes This Week Comments: While the market disintegrated around us, Denny's was able to find a new 52 week high last week on an earnings report that showed growth for the first time in more than a year. They 8 cents per share versus 5 cents in the year ago quarter. Revenue was 0.6% higher than the year ago quarter at $135.9 million. The company essentially matched analyst expectations for the quarter. John Miller, President and CEO, said, “Denny’s positive same-store sales and guest counts are a testament to the success of our current market strategies, emphasizing everyday affordability with attractive Limited Time Only products. We are especially pleased that we can achieve an increase in sales and profitability despite significant headwinds coming from inflationary pressures and the challenging consumer economic environment.” PLXT(NASDAQ) Buy: $3.85 Sell: $6.00 Stop Loss: $2.85 Date Added: 7/6/2010 Condition Updates: No Changes This Week Comments: This stock remains fairly lightly traded and we are not going to move the stop loss for overall market conditions because of the good quarterly report late last month coupled with the fairly light attention. The company announced a significant new product to begin rolling out later this year. LVLT(NASDAQ) Buy: $2.50 Sell: $3.95 Stop Loss: $1.55 Date Added: 7/11/2011 Condition Updates: Stop Loss Lowered Comments: We are lowering our stop loss for LVLT to try and avoid losing the position as a very heavily traded stock like this will move right along with the major markets. Nothing has changed fundamentally for the company. The company announced last week that shareholders of Level 3 Communications Inc. and Global Crossing Ltd. have separately approved Level 3's $2.9 billion purchase of Global Crossing. ETAK(OTCBB) Buy: $3.00 Sell: $6.50 Stop Loss: $2.15 Date Added: 8/8/2011 Condition Updates: Brand New Position Comments: Elephant Talk Communication's recent acquisition of ValidSoft puts them in a unique position in the relatively infantile mobile payments security arena. Mobile payments are expected to rise from $240 billion to $670 billion in 2015, and so far, the level of security is no where near what it is for traditional online payments. ETAK just announced that it will host a Shareholder Update conference call on August 16, 2011. NENE(OTCBB) Buy: $1.50 Sell: $2.95 Stop Loss: $1.05 Date Added: 7/11/2011 Condition Updates: No Changes This Week Comments: New Energy continues to see very light trading activity and not much price movement, but is holding up quite well with a solid base above a dollar. New Energy continues to lay low, file all of the proper paperwork with the SEC and seemingly move forward with patents and licensing agreements. The light action in the stock will allow us to let it simmer on the back burner a bit while we wait for what could be a stock moving announcement with respect to it's SolarWindow application. AUGT(OTC BB) Buy: $3.50 Sell: $7.25 Stop Loss: $2.45 Date Added: 8/1/2011 Condition Updates: No Changes This Week Comments: As far as unlisted stocks go, we believe Augme Technologies looks pretty good right now. There is hardly any short interest in the stock, and earnings seemingly have no where to go but up. AUGT just bought the start-up bar code company Jagtag, amping up their intellectual property portfolio in an infantile business. Jagtag is a pioneer in mobile marketing allowing consumers to photograph bar codes with their smartphones, and get more information about that specific product. The company just announced that they will purchase assets of mobile marketing and advertising leader Hipcricket. IWEB(OTCBB) Buy: $0.20 Sell: $0.50 Stop Loss: $0.125 Date Added: 2/7/2011 Condition Updates: No Changes This Week Comments: IceWeb announced last week that the merger with Promark Technology announced on March 7, 2011 is continuing to progress towards a successful close. They also continue to announce more new contracts and more new products. Despite the slow trade, we'll continue to sit tight on this data storage company that may be surprisingly right in the middle of the cloud computing frenzy. Although no one really seems to be paying attention to this company, we believe that this will soon change. Monday August 1, 2011 After a fairly brutal week in the markets and a volatile day today, we were stopped out of a whopping four positions, 3 of which were profitable stop losses. GSAT dipped below a dollar and was the only position stopped out that resulted in a loss. LTXC and KEM were stopped out for close to a 100% gain and both of these stocks had been in the portfolio for way to long. Please note that both of these issues had split while we were holding them, and our buy, sell and stop loss conditions had been updated to reflect the new post split prices. EGHT was stopped out for a substantial gain, a stock that we would still like to keep a close eye on and possibly add back to the portfolio in the near future. We are adding only three new positions to the portfolio this week with the idea of leaving the tenth spot as a cash holding for the time being. Depending on how the markets react throughout this week to the debt deal and economic data, we may add that tenth position next week. This week, we are adding FEED (NASDAQ), USU (NYSE) and AUGT (OTC BB). FEED(NASDAQ) Buy: $2.00 Sell: $4.15 Stop Loss: $1.45 Date Added: 8/1/2011 Condition Updates: Brand New Position Comments: AgFeed Industries has bounced off of it's $1.00 low quite substantially, and looks to be headed north bound for the time being. The company that wants to bring a western style cattle and swine business to China has been getting a lot of good press lately. This company has been growing revenues quarter after quarter and year after year. The stock has been beaten down so much in the past couple of years that it currently sits with some unreal valuations. Some recent acquisitions are helping the company's bottom line, which has been hampered a bit lately due to skyrocketing pork prices. Good news for AgFeed was announced late last week that the Chinese government will be stepping in to help stabilize the market, and will be handing over cold hard cash to pig farmers. Watch for our Members Exclusive article to be issued on FEED later this week. GLUU(NASDAQ) Buy: $5.25 Sell: $8.95 Stop Loss: $3.25 Date Added: 7/12/2011 Condition Updates: No Changes This Week Comments: Glu Mobile reports earnings after the close tomorrow and with fairly high short interest and heavy trading volume of late, we could see the stock move substantially. The company is expected to show a great quarter, so perhaps just beating estimates by a fraction will not be enough. The company already re-upped their guidance, and analysts are expecting revenue of $16.6 million and a loss of 4 cents per share. Two very real factors add to the possibility of an excellent quarter, Apple's extremely strong earnings report coupled with Electronic Arts' strong report. Keep in mind that Glu makes their products specifically for devices like the iPhone and iPad, which are Apples core products right now. DENN(NASDAQ) Buy: $4.00 Sell: $8.00 Stop Loss: $3.25 Date Added: 3/17/2011 Condition Updates: No Changes This Week Comments: We feel that Denny's continues to be a great value play, and considering that 95% of all adult Americans have eaten there at some point in there lives, there is no reason to think that they won't go back. The company has cleaned up it's balance sheet and has nothing left to focus on other than growing the business. Several new advertising campaigns touting tastier food at very reasonable prices is occurring simultaneously with new store openings across the country. PLXT(NASDAQ) Buy: $3.85 Sell: $6.00 Stop Loss: $2.85 Date Added: 7/6/2010 Condition Updates: No Changes This Week Comments: Despite posting an excellent quarter last week, PLX Technology continues to see some pretty lackluster interest from the investing community. The stock did jump substantially on the report, but then trickled back down into the middle of the $3-4 range it has been in for over a year now. We'll continue to sit tight with the stock and look for a slow but steady climb out of this range. LVLT(NASDAQ) Buy: $2.50 Sell: $3.95 Stop Loss: $1.85 Date Added: 7/11/2011 Condition Updates: No Changes This Week Comments: Excluding cost from the Global Crossing transaction, LVLT matched estimates, however, traders have not found a lot of positives in the earnings report released last week. Nevertheless, we are still excited about the companies revenue growth, and its mid term outlook, especially after Global Crossing becomes part of the numbers later in the year. USU(NYSE) Buy: $3.25 Sell: $6.75 Stop Loss: $2.45 Date Added: 8/1/2011 Condition Updates: Brand New Position Comments: USEC Inc. was one of our potential short squeeze candidates from last week, and we believe it is one of the most promising issues on that list for other reasons as well. Despite having high short interest and dipping below the five dollar threshold, plenty of institutions are still buying up shares at this level. The company is expected to release earnings this Thursday, August 4. Analysts are expecting a 9 cent loss on just over $401 million in revenue. USU has beaten analyst estimates exponentially in three out of the last four quarters. NENE(OTCBB) Buy: $1.50 Sell: $2.95 Stop Loss: $1.05 Date Added: 7/11/2011 Condition Updates: No Changes This Week Comments: New Energy continues to see very light trading activity and not much price movement, but is holding up quite well with a solid base above a dollar. New Energy continues to lay low, file all of the proper paperwork with the SEC and seemingly move forward with patents and licensing agreements. The light action in the stock will allow us to let it simmer on the back burner a bit while we wait for what could be a stock moving announcement with respect to it's SolarWindow application. AUGT(OTC BB) Buy: $3.50 Sell: $7.25 Stop Loss: $2.45 Date Added: 8/1/2011 Condition Updates: Brand New Position Comments: As far as unlisted stocks go, we believe Augme Technologies looks pretty good right now. There is hardly any short interest in the stock, and earnings seemingly have no where to go but up. AUGT just bought the start-up bar code company Jagtag, amping up their intellectual property portfolio in an infantile business. Jagtag is a pioneer in mobile marketing allowing consumers to photograph bar codes with their smartphones, and get more information about that specific product. IWEB(OTCBB) Buy: $0.20 Sell: $0.50 Stop Loss: $0.125 Date Added: 2/7/2011 Condition Updates: No Changes This Week Comments: More new contracts and more new products. Despite the slow trade, we'll continue to sit tight on this data storage company that may be surprisingly right in the middle of the cloud computing frenzy. Although no one really seems to be paying attention to this company, we believe that this will soon change. Monday July 25, 2011 GSAT(NASDAQ) Buy: $1.80 Sell: $2.95 Stop Loss: $1.05 Date Added: 6/10/2010 Condition Updates: No Changes This Week Comments: GlobalStar continues to stabilize, albeit tentatively, above our stop loss level, and we will continue with the same conditions in hopes of sticking around a little while. On Wednesday, Allroadsat.com, which sells and rents out GlobalStar's phones and accessories along with other brands, announced the availability of a new solution to connect laptops, phones and more to the Internet anywhere in the world. GlobalStar is featured prominently on their website, and also appears to be one of the cheaper solutions offered. GLUU(NASDAQ) Buy: $5.25 Sell: $8.95 Stop Loss: $3.25 Date Added: 7/12/2011 Condition Updates: No Changes This Week Comments: Electronic Arts' acquisition of PopGap Games gave Glu Mobile a little boost initially when it was announced back on July 12. The stock remains at that same level after speculation has started to heat up concerning more acquisitions in the small but quickly growing space. Keep in mind that GLUU's earnings are expected to jump 115% next year and 30% annually for the next five years. These are forecasts that have not been widely updated in the last 30 to 90 days. DENN(NASDAQ) Buy: $4.00 Sell: $8.00 Stop Loss: $3.25 Date Added: 3/17/2011 Condition Updates: No Changes This Week Comments: Last week The Center for Science in the Public Interest called out several chain restaurants, including Denny's, for including meals on their menus that have excessive calorie, fat and sodium content. The stock did not notice a correction and in fact has rallied a little bit since management was able to get ahead of this story and similar ones by teaming with other restaurant chains and announcing an initiative to slim down their advertising methods to young people. They would seemingly be advised to continue such efforts. Shares were also helped by an announcement that the earnings release and conference call will occur on August 2, 2011, as well as favorable overall market conditions. PLXT(NASDAQ) Buy: $3.85 Sell: $6.00 Stop Loss: $2.85 Date Added: 7/6/2010 Condition Updates: No Changes This Week Comments: PLX Technologies reported earnings just after the bell today, and without knowing exactly what will happen to the stock after hours tonight, and tomorrow, we will leave our conditions in place for the time being. Analysts expected a 7 cent loss for PLXT, however, they posted a six cent loss. They also beat revenues substantially posting $30.7 million as opposed to the $29 million seen. Although no specifics were given, the company did guide positively for next quarter as well, which is currently expected to see $32 million in revenue and a 2 cent loss. This stock is not heavily followed at this time so the small amount of after hours trades should not be given to much weight. PLXT beat estimates by 3 cents two quarters ago and the stock climbed from $3.20 to $4.00 in a few weeks. LVLT(NASDAQ) Buy: $2.50 Sell: $3.95 Stop Loss: $1.85 Date Added: 7/11/2011 Condition Updates: No Changes This Week Comments: Level 3 reports earnings this coming Wednesday, July 27, 2011. Analysts expect a loss of 9 cents per share which is an upward revision from 10 cents a share three months prior. LVLT has beaten estimates by as much as a penny in each of the last four quarters. Revenues are expected to be 3.3% higher. The company announced on July 20 an agreement with Critical Data Network, Inc. to provide the company with high-speed Internet protocol (HSIP) services in support of its expanding operations in Southern California and Mexico. LTXC(NASDAQ) Buy: $4.50 Sell: $10.25 Stop Loss: $8.00 Date Added: 12/8/2009 Condition Updates: Stop Loss Raised Comments: LTX-Credence continues to skirt our stop loss, we have decided to raise it a little bit from $7.90 to $8.00. Not too dramatic, but as we mentioned last week we wouldn't mind getting out of the profitable position sooner rather than later. The stock has stabilized a bit over $8.00 and we feel it's worth sealing another 10 cents. Should $8.00 remain the floor, we could still see more gains out of this stock, keep in mind they beat estimates quite dramatically in their last quarterly report and guided substantially higher for this quarter. Results will not be out again until late August, early September. NENE(OTCBB) Buy: $1.50 Sell: $2.95 Stop Loss: $1.05 Date Added: 7/11/2011 Condition Updates: No Changes This Week Comments: New Energy continues to lay low, file all of the proper paperwork with the SEC and seemingly move forward with patents and licensing agreements. The light action in the stock will allow us to let it simmer on the back burner a bit while we wait for what could be a stock moving announcement with respect to their SolarWindow application. EGHT(NASDAQ) Buy: $2.55 Sell: $6.95 Stop Loss: $3.95 Date Added: 1/11/2011 Condition Updates: Stop Loss Lowered Comments: Despite an earnings report that was in line or slightly better than expectations, Wall Street wanted more, perhaps because they were expecting more than they were expecting. Perhaps the lack of excitement allowed investors to reflect on the higher valuations seen in this stock after it has more than tripled over the last year. The record revenues and low churn rate cannot be disputed however, and we are lowering our still profitable stop loss from $3.95 to $3.65 to avoid being stopped out in the event of any more erratic trade. KEM(NYSE) Buy: $6.00 Sell: $16.00 Stop Loss: $12.00 Date Added: 6/10/2010 Condition Updates: No Changes This Week Comments: We'll continue to hold this stock as it drifts closer to our profitable stop loss while earnings are coming up on Wednesday of this week. Last Wednesday they announced some new first-to-market capacitors. IWEB(OTCBB) Buy: $0.20 Sell: $0.50 Stop Loss: $0.125 Date Added: 2/7/2011 Condition Updates: Sell Lowered Comments: After announcing a new contract two weeks ago, IceWeb announced another new one last week, and also unveiled a new product. Despite the slow trade, we'll continue to sit tight on this data storage company that may be surprisingly right in the middle of the cloud computing frenzy. Monday July 18, 2011 GSAT(NASDAQ) Buy: $1.80 Sell: $2.95 Stop Loss: $1.05 Date Added: 6/10/2010 Condition Updates: No Changes This Week Comments: After a couple of short delays, GlobalStar launched six new satellites from Kazakhstan last Wednesday. This was the second of four scheduled launches, each sending six next generation satellites into space. When all of these launches are done, GSAT expects to have the highest quality voice and fastest data satellite service in the world. We will be watching the stock closely as it is close to our stop loss level, but do not want to make any condition changes just yet. GLUU(NASDAQ) Buy: $5.25 Sell: $8.95 Stop Loss: $3.25 Date Added: 7/12/2011 Condition Updates: No Changes This Week Comments: Glu Mobile continues to be very hot since we added to the portfolio last week and has jumped quite substantially from our buy point in a very short period of time. We want to have some patience, however, before we raise a stop loss or anything like that. Late on Tuesday night last week, the company announced a deal to acquire casual games company PopGap from Electronic Arts for somewhere in the neighborhood of a $1 Billion. PopGap had more revenues than all of Glu Mobile last year at around $100 million, and those revenues are expected to increase by 40% this year. This is all being perceived as good by the street, however, it is important to note that a company director just sold over $2 million worth of stock. We want to remain fairly relaxed with our conditions for the time being. DENN(NASDAQ) Buy: $4.00 Sell: $8.00 Stop Loss: $3.25 Date Added: 3/17/2011 Condition Updates: No Changes This Week Comments: Denny's popped a little bit last Wednesday as well but has since settled down into it's recent pattern of very steady price action with volume that is nothing special. Last week, they announced backing an industry effort to serve and promote healthier meals for kids. This again shows how good this new management team is getting on board with this right away, as even McDonald's and Subway weren't ready. Although congress may or may not act, this will certainly help cool some of the heat that has been coming from public health officials and consumer advocate groups. PLXT(NASDAQ) Buy: $3.85 Sell: $6.00 Stop Loss: $2.85 Date Added: 7/6/2010 Condition Updates: No Changes This Week Comments: PLX Technologies saw some volatile trade today, but stabilized quite nicely after seeing a substantial dip on no apparent news. The stock has been trending with the markets of late and volume has remained strong, but not overly intense. Both of these things could change when earnings are announced a week from today. We have no real guidance to go on, so we'll just have to wait and see. LVLT(NASDAQ) Buy: $2.50 Sell: $3.95 Stop Loss: $1.85 Date Added: 7/11/2011 Condition Updates: No Changes This Week Comments: Level 3 has come back a little bit more since adding it to the portfolio last week, but this seems to be the overall market trend. We have a fairly tight stop loss and conservative profit target for this position for a reason. The company has substantial debt and a lot of shares out, and it will be hard pressed to skyrocket anytime soon. With that said, we do feel strongly that the trend is up right now, even if it is slow and steady. The company just added about $600 million to their debt late last week via some senior notes. They also announced their next earnings release date: Wednesday, July 27. LTXC(NASDAQ) Buy: $4.50 Sell: $10.25 Stop Loss: $7.90 Date Added: 12/8/2009 Condition Updates: No Changes This Week Comments: LTX-Credence is extremely close to our profitable stop loss, and we will likely be ditching it soon. Keep in mind that it is still trading for almost twice what we paid. As we mentioned last week, some revenue declines and some insider selling may be our opportunity to get out sooner rather than later. We'll keep you posted. NENE(OTCBB) Buy: $1.50 Sell: $2.95 Stop Loss: $1.05 Date Added: 7/11/2011 Condition Updates: No Changes This Week Comments: This company's quarterly report came out on Wednesday of last week after we added it to the portfolio, and the stock did not really see much action. Looking at the report, we can see why, they spent significantly less on promoting their stock, and spent a lot more on R&D. This is actually a good thing, even if it means that we may continue to see light trade in the coming weeks and months. It also means that most if not all of the selling that typically occurs after a huge run up in these types of stocks is behind us. We are just waiting on some big news regarding research on their flagship product, the solar window coating, and to a lesser extent, their other product. As a development stage company, we are not concerned right now with when they will start bringing in some cash, we are only watching the potential of that future cash. EGHT(NASDAQ) Buy: $2.55 Sell: $6.95 Stop Loss: $3.95 Date Added: 1/11/2011 Condition Updates: No Changes This Week Comments: 8x8 continues to look very good. Earnings will be announced Wednesday and we are looking forward to hearing the new subscriber growth numbers and churn rate. This stock could move quickly which is why we raised our target last week, we my raise it once again next week if it's not met, especially if things turn around in the major markets, earnings are good and the stock has the opportunity to continue trending higher on the momentum. KEM(NYSE) Buy: $6.00 Sell: $16.00 Stop Loss: $12.00 Date Added: 6/10/2010 Condition Updates: No Changes This Week Comments: This stock is also flirting with our profitable stop loss and it has been in the portfolio for quite a while. The stock has seen a slide over the past two weeks, but we will likely keep our stop loss in place at least through the earnings announcement slated for July 27. After that, if things do not get going again, and our stop loss isn't breached, we may raise that profitable stop loss until it is. IWEB(OTCBB) Buy: $0.20 Sell: $0.50 Stop Loss: $0.125 Date Added: 2/7/2011 Condition Updates: Sell Lowered Comments: After climbing 50% from our buy point twice, this stock has drifted back down to that same level once again. It looks very stable, however, in this range, and the market for this company's products continues to look very good. The company just announced yet another contract. The low volume we have seen has caused us to lower our profit target quite substantially to reflect a shorter time horizon. Monday July 11, 2011 GSAT(NASDAQ) Buy: $1.80 Sell: $2.95 Stop Loss: $1.05 Date Added: 6/10/2010 Condition Updates: No Changes This Week Comments: GSAT continues to flirt with our stop loss, however, no significant fundamental changes have occurred to cause our outlook to change. The company continues to make strides with respect to their debt load, and continue to launch their new genreation sattelittes. Add some recent earthly strides with resepct to usability, and throw in more and more value in the stock, and we believe investors will begin to come on board. The company's next quarterly report should be out in early August. GLUU(NASDAQ) Buy: $5.25 Sell: $8.95 Stop Loss: $3.25 Date Added: 7/12/2011 Condition Updates: Brand New Position Comments: After a very promising looking first quarter this year, GLUU came out at the end of may and upped their guidance for the second quarter. The primary growth driver has been a dramatic increase in smart-phone revenue. The possibility of even more upward revisions remains, especially with a slew of social media IPOs ready to take off, including Zynga, the provider of social and mobile games. This market is extremely hot right now, and although playing the games is not a problem, finding ways to play the investment is. Glu Mobile, a small cap, is a great way to get on board well before any of the IPOs hit the market. The company has zero debt and $24 million in cash on the balance sheet. DENN(NASDAQ) Buy: $4.00 Sell: $8.00 Stop Loss: $3.25 Date Added: 3/17/2011 Condition Updates: No Changes This Week Comments: Since our original report, Dennys' new managment team has been inivation right on schedule with a slew of new menu items. Revenues during the most recent quarter remained very steady, and they spent the most in R&D since the June quarter of 2010. The stock has remained very stable as well, and there seems to be even more value now, than when we bought it. We are keeping our stop loss fairly tight as economic activity will likley be the deciding factor as to which direction we go from here. PLXT(NASDAQ) Buy: $3.85 Sell: $6.00 Stop Loss: $2.85 Date Added: 7/6/2010 Condition Updates: No Changes This Week Comments: PLXT continues to trade with decent volume and has stayed well within our conditional range. Earnings are slated for July 25, 2011. The company has not issued any guidance for this quarter, although they mentioned in their latest quarterly filing that the earthquake and tsunami in Japan has the potential to disrupt their supply chain. They did mention that measures were in place to avoid any problems. LVLT(NASDAQ) Buy: $2.50 Sell: $3.95 Stop Loss: $1.85 Date Added: 7/11/2011 Condition Updates: Brand New Position Comments: Revenues and gross profits have been improving quarter over quarter for the past year and although the company has yet to hit profitability, it has beefed up the asset portion of the balance sheet quite substantially. LVLT now has over a billion dollars in cash, nearly twice what was seen just a couple of quarters ago. Although profitably is not seen in the near future, double-digit earnings growth is. The cash stockpile coupled with rapid growth overseas and some new initiatives, including a deal with Global Crossing (GLBC), may allow the company to see green sooner that what is expected. LTXC(NASDAQ) Buy: $4.50 Sell: $10.25 Stop Loss: $7.90 Date Added: 12/8/2009 Condition Updates: Profit target lowered Comments: Although we recently upped our stop loss to a profitable level, we have lowered our profit target to tighten the range a little bit. Early this month, we saw a slew of insider selling, nothing major, but there clearly seems to be some resistance at the ten dollar range. Also, the companies most recent quarterly report showed some revenue declines based on uncertainty amoung customers due to the recent merger. It is unclear as to how much of this uncertaintly has been worked out. NENE(OTCBB) Buy: $1.50 Sell: $2.95 Stop Loss: $1.05 Date Added: 7/11/2011 Condition Updates: Brand New Position Comments: Although trading activity has dwindled quite a bit in this stock since our origional report, the stock price and valuations have come down significantly. This coupled with continued success with their two completely noval alternative energy products allows us to add the stock to the portfolio, abeit as a very speculative buy. EGHT(NASDAQ) Buy: $2.55 Sell: $6.95 Stop Loss: $3.95 Date Added: 1/11/2011 Condition Updates: Profit target and stop loss raised Comments: Based on the seemingly limitless growth in this stock since adding it to the portfolio, we would like to seal the deal on a substantial profit, and also allow for even more gains. Therefore, we have raised both our sell target and our stop loss target. The compnay has set it's first quarter earnings release and conference call date for July 20. KEM(NASDAQ) Buy: $6.00 Sell: $16.00 Stop Loss: $12.00 Date Added: 6/10/2010 Condition Updates: Profit target lowered Comments: This stock has been well out of penny stock range since the reverse split, and after we raised our stop loss target, it has remained in a reletively tight trading band. We have lowered our target a little bit to hopefully be fulfilled sooner rather than later, assuming the stock continues to drift back towards the upper end of its year to date range. The company recently announced the construction of a new facility, and also announced being added to the Russell 3000 Index. Earnings are secheduled for July 27. IWEB(NASDAQ) Buy: $0.20 Sell: $1.00 Stop Loss: $0.125 Date Added: 2/7/2011 Condition Updates: No Changes This Week Comments: Right now this stock is our second most speculative play. It continues to see bursts of trading volume coupled with very stable price action. We feel very comfortable with our current conditions. They continue to announce new contracts. March 17, 2011 DENN Added @ $3.97, SATC removed @ stop loss $3.85 March 2, 2011 We are lowering our stop loss for GSAT from $1.25 to $1.05 to try and avoid getting stopped out, but in the process are increasing the risk. We have also lowered the profit target from $4.15 to $2.95. The stock saw a major insider buy in January, and the company has extended principle payments on some or all of it's financing. The major risk here is the debt load they are carrying at around $700 million, quite a bit. They have made strides with respect to the balance sheet over the last few quarters, and revenues have been climbing at a decent clip as well. The company just needs to keep launching more satellites to give their 400,000+ subscribers a reason to stay, and bring in new ones. A recent waiver from the FCC for a competing (although not directly) mobile satellite services provider, Lightsquared, granting them the use of mobile satellite spectrum has GSAT hoping the FCC will extend similar relaxations it's way. This would help GSAT in two main ways. First of all, it's revenues are growing, but it's margins are not, and subsequently, earnings are not. Additional spectrum would help margins significantly. It would also create more value for subscribers, something they have been struggling with for some time. We would like to stick around as long as possible without lowering the stop loss too much, earnings should be out early this month. February 28, 2011 Stop loss target raised for SONS from $1.20 to $2.75 to ensure profitability. February 15, 2011 Update on IWEB: IWeb released it's fiscal first quarter results yesterday. The report is generally mixed, and very light volume remains in the stock. Revenue and gross profit increased both sequentially and year over year. The company is very confident about short and mid term growth and is projecting a very robust second quarter. A couple of things to watch out for, however, appear on the latest balance sheet. The company burned through half of their $1/2 million in cash, added more than 5 million to their 132 million share count, decreased assets and increased liabilities. Possibly weighing out some of the concern is IWEB's massive reduction to general and administrative expenses, and a very large increase in research & development. Overall we are still comfortable holding this with our current stop loss in place. February 14, 2011 Stop loss target raised for KEM from $4.95 to $12.00 to ensure profitability. February 7, 2011 IWEB Added @ $0.205, AEGY Removed @ $0.36 February 7, 2011 Stop loss target raised for LTXC from $2.85 to $7.90 to ensure profitability. February 1, 2011 Stop loss target raised for ENTG from $3.50 to $6.85 to ensure profitability. 4Q profit doubled, outlook is still great, we may stick around for a while. January 24, 2011 Stop loss target was raised for SATC from $2.15 to $3.85 to ensure profitability. We want to stick around in case there is a little bit of weakness, but not if there is a lot. January 21, 2011 We believe that recent market weakness may present another buying opportunity for EGHT. It has pulled back by around 10% from the highs found late last week, and is back to where it was when we initiated the buy. Good news on Wednesday concerning their referral rewards payments may be better than what Wall Street has thought thus far. Keep in mind their next earnings release will be on January 26. Look for a potential upside surprise. Tuesday, January 11, 2011 EGHT Added @ $2.55, KATX Removed @ $0.042 Tuesday, October 12, 2010 SATC continues to see positive action, good coverage and substantive developments. We have decided to raise our profit target from $5.45 to $6.00. Monday, October 11, 2010 PLXT was mentioned on Investopedia as one of 5 semiconductor stocks under 10 bucks recently experiencing a technical buy signal: "The most common buy sign is triggered when the MACD line crosses above the signal line. A MACD cross above the signal line tends to predict that the bulls are gaining control of the direction and it generally leads to a short-term move higher. Interestingly, traders have been spotting bullish MACD crossovers on the charts of many semiconductor stocks. The bullish movement in the utility sector could be used by active traders to suggest that the economic recovery is on track and could be stronger than many of the pundits have been suggesting." Friday, October 8, 2010 LTXC, which continues to trade under the symbol LTXCD for now, saw some volatility yesterday and today. The stock climbed from $6.20 to $6.60 on Thursday, and then tanked back to $6.20 today, making it one of the biggest percentage losers on the NASDAQ. We believe this volatility simply stems from valuation confusion surrounding their recent reverse stock split and are not concerned. We have adjusted our conditions to reflect the reverse split, but are holding off on changing the profit target for now. Thursday, October 7, 2010 Westell Technologies, Inc., WSTL, continues to show a ton of support above 2 dollars leading up to their September 30, 2010 fiscal second quarter results. The release will occur on October 20, with a conference call scheduled for Thursday, October 21, 2010. The company has been quiet through most of this quarter making it very important to keep an eye on what happens leading up to the call, and immediately after. Only one analyst covers this stock, and has grossly underestimated earnings over the last three quarters. For the September 2009, quarter, 3 cents was the estimate, they earned 4 cents. December, 2009: estimate, 2 cents, actual, 4 cents. March 2010: estimate, 3 cents, actual, 4 cents. June, 2010: estimate 3 cents, actual, 7 cents. The estimate for this quarter is 4 cents, which also looks to be pretty low. The stock has a P/E right now of 12, and the forward P/E of 13 just doesn't match, and probably should be about half of that. We believe this stock continues to be a great growth and value story, and will continue to hold with our current conditions. Wedensday, October 6, 2010 GSAT issued another photo release today of one of their satellite dispensers due for launch. The first of four launches of six satellites each is scheduled for October 19, 2010. "The updates to our ground monitoring control centers, data network and system planning center and the TCU gateway upgrades complete the final ground network installation milestones required for the launch of our new satellites," said Peter Dalton, Chief Executive Officer, Globalstar, Inc. "Once our new constellation is fully deployed next year, we expect to once again reliably provide the world's finest quality mobile satellite voice and fastest mobile satellite handset data services to commercial and government customers around the world. Combined with our affordable and award-winning suite of consumer retail SPOT products, Globalstar will unquestionably offer the world's most extensive lineup of high quality mobile satellite services to the broadest range of commercial and retail consumer customers around the globe." Overall, the company has been a little late on these next generation satellites based on what was promised back when we added the stock to the portfolio. They have obtained more new satellites than originally planned, however and at a quicker pace. With 400,000 subscribers still waiting for better quality, it makes sense to do it right, and if these launches get underway successfully, we may see the stock begin to launch as well. Financial results are slated to be released early next month, and we will likely hold through that date. The stock is right in the middle of a six month trading range, and has seen higher and higher lows during that time. Tuesday, October 5, 2010 Our pink sheet speculation plays ADSY and KATX continue to be non-performers in the portfolio, and are well overdue from our typical holding time. We have seen a little bit of stability over the past month making it worth holding on for the chance of a pop. Both have continued to provide upbeat press releases and some substantive developments, however, they have been left behind for now in this instant gratification market. Right now, we are simply waiting to see just a little bit of strength where we will be disposing of both positions. Monday, October 4, 2010 AEGY has seen a little bit of positive action over the last month, and we are continuing to hold despite it's lackluster performance in the portfolio. The holding has also been a little long based on our original time horizon. Their annual financial statements should be released early next month that may include some revenues, although probably nothing yet from the European deals announced in July or from any of the recent acquisitions. What they have been spending will likely be more significant. Dilution is a concern as they have obviously been making these acquisitions with money they do not have. As of their last filing, they had around 50 million shares out, and an S-8 filing from early august adds another 20 million. Heres where it gets murky: They had just 75 million share authorized at their last filing, and there has not been any filings concerning a shareholder vote to increase this amount. On October 1, 2010, they announced the RLP acquisition that was being paid for with 56 million shares. Unfortunately, this won't be cleared up in the next filing because it occurred after the end of the reporting period. A recent change in their accounting firm also adds to the uncertainty. Why are we still holding on, you may ask? Well, the dilution is not outrageous, and it is funding revenue producing acquisitions, rather than high dollar corporate lunches. Also, the stock is not trading on any fundamental data, but rather, pure speculation just as a development stage company would. The strength in the stock price despite the dilution, which has been somewhat disclosed, as well as the continued consistent volume makes us feel a lot more comfortable. Also, with their European deals, and increasing footprint in the U.S., we would not be surprised to see a significant investment from a relatively large financial institution. A third acquisition is also planned that will further add to revenues, which gives us at least one more potential good news story to help the stock in the near term. Friday, October 1, 2010 Please note that LTX-Credence's symbol has changed from LTXC to LTXCD for the next 20 trading sessions, and will then revert back to LTXC. The reverse split that was announced earlier in the month is a one for three split, and puts the stock easily above five dollars. Just like KEM, this will allow a lot more institutional ownership going forward. LTXC looks even cheaper, and has already achieved profitability. Their forward P/E is at just 3.6, and it is trading at 1.6 time book value. There are a lot more analysts covering this which is a good sign for institutional support. Most of these analysts, by the way, have the stock more than doubling from here. We will likely be adjusting our profit target shortly. Remember for now to multiply our conditions by three. Thursday, September 30, 2010 Kemet has seen some wild trade since it graduated to the AMEX back in late June, surprisingly more volatile than when it traded on the OTC BB. Things have calmed down a bit over the past two months as volume has slowed but become more consistent. Over this time, the stock has climbed from below $2.50 back towards $3.50. The fifty two week high is four bucks, which was very close to our profit target of $4.10 after adding it to the portfolio at around $2.00. Depending on what happens when their quarterly results are announced in late October or early November, or leading up to that point, we may adjust our profit target up or down. So far over the last few quarters, KEM has not disappointed, at least from a revenue growth standpoint. Last quarter, revenues increased year over year by 62%, and quarter over quarter by 14.5%. In fact, revenues have increased substantially over the past four quarters, and are now back to where they were before the recession set in. Margins have also improved a little bit, and valuations are all still very low. The stock currently trades right at book value, thanks to some deep improvements to their balance sheet. They still have a little bit of work to do to get completely out of the hole they were forced to dig in 2009 from a debt perspective, but they are likely to get a lot closer to profitability by the end of the year. The forward P/E based on next years revenue guidance is at 17, but keep in mind that their are barley any analysts covering this stock. Shares outstanding still being in the 80 million range, very low considering what they went through, is perhaps one of the best signs for this company going forward. We are holding on to the stock and are not concerned with the recent decline in volume, or the announcement today of voting for a reverse stock split. The reverse split would allow institutions to get involved in a big way. The stock is currently only 3% owned by institutions, and a price over five or ten dollars coupled with profitability around the corner could easily bring the big boys on board. Considering the tiny share count at that point, the stock could really get a boost. A good quarterly report next month could accelerate this process. Wednesday, September 29, 2010 SATC saw a big bounce today bringing it back very close to it's 52 week high. The company announced a strategic manufacturing agreement with GCL Solar Systems Limited , one of Chinas largest utility solar power plant developers, to enhance production of their 500 kilowatt (kW) PowerGate Plus line of solar PV inverters for the Asia Pacific market. The additional 500 megawatts in expected annual production capacity beginning in March 2011 increases worldwide manufacturing capacity to over 2 gigawatts. This is a very substantive agreement, and depending on what the stock does over the next few days, we may once again raise our profit target for this position. Tuesday, September 28, 2010 Todays announcement from SONS concerning Armstrong Cable deploying their Class 4 VoIP core for a network migration project is significant, although the stock hasn't seen much movement. Armstrong is the 16'th largest cable TV provider in the U.S, and they operate in four pretty big states: Pennsylvania, Ohio, Maryland, West Virginia and Kentucky. This comes on the heals of another deal announced late last month with 360Networks, another company with a fairly big footprint. Also last month, Sonus announced a small reduction in workforce of 12 employees and the consolidation of two offices into one. This will save the company around $2 million a year, but will cost $3-4 million in the near term. We are recommending taking some profits in SONS as it is up considerably from our buy point, and the possibility of a lackluster quarterly earnings report coming next month could hit the stock a little bit. We still like the long term prospects and are holding off on removing it from the portfolio right now. Monday, September 27, 2010 PLXT, which has slipped a little bit since we added it to the portfolio in July, announced last week a merger agreement to acquire all of the outstanding shares of capital stock of Teranetics, Inc., a privately held fabless provider of high-performance mixed-signal semiconductors. We believe that PLXT got this company relatively on the cheap, only adding 7.4 million shares to their total outstanding of 37 million, taking just over a million from their $43 million in cash, and adding $6.9 million in notes payable. Teranetics brings in $1-2 million in revenue per quarter which is expected to accelerate to $18 million for all of 2011. The longer term prospects of this company is where the value is, however. They are the only company currently with a 10 gigibit ethernet over copper solution in a market that is currently dominated by 1 gigibit. 10 gigibit is expected to take over during the next five years. PLXT currently dominates the PCI Express market with a 65% share. Teranetics dominates the 10 gigibit ethernet space and currently has a 60% market share. They both share several big customers, and overall, their customer base will increase. Basically what this deal does is dilute PLXT by 20%, but could bring in 50% of the revenues or more by 2013-14. The stock has been hit a little bit since this announcement came because of the near term dilution. We are not concerned and will keep the same conditions going forward, we believe the longer term benefits may be recognized by investors as soon as 10 gig becomes more well known. 9/22/2010 ENTG Added @ $4.50, ADSY Removed @ $0.03 Monday, August 16, 2010 9:30AM WSTL, (NASDAQ), was added to the PSD10. Most recent closing price was $2.10. WSTL was added with a buy target of $2.05, a profit target of $3.95, and a stop loss target of $1.69. Our time horizon for this trade is 2-6 Months. See report below. PRRY was removed from the PSD10 and added to our historical performance log Wednesday, July 28, 2010 9:25AM ADSY, (OTC BB), was added to the PSD10. Most recent price was $0.04. ADSY was added with a buy target of $0.05, a profit target of $0.16, and a stop loss target of $0.039. Our time horizon for this trade is 1-2 Weeks. See report below. NNVC was removed from the PSD10 and added to our historical performance log Tuesday, July 20, 2010 3:35PM AEGY, (OTC BB), was added to the PSD10. Most recent price was $3.93. AEGY was added with a buy target of $0.135, a profit target of $0.26, and a stop loss target of $0.079. Our time horizon for this trade is 1-2 Months. See report below. TRDX was removed from the PSD10 and added to our historical performance log Wednesday, July 14, 2010 8:45AM A little bit of strength from our Pink Sheet stocks on Monday and Tuesday this week has prompted us to hold off just a little bit on reshuffling. OTC stocks tend to lag the major markets, and very positive action in Blue Chips may carry over to these positions in the coming days. Nevertheless, these stocks are still well below profitability for us, but we have seen volume return dramatically with no major sell offs. TRDX and PRRY both bounced almost exactly off of our stop loss points, and in the hopes of saving some capital, we have lowered our profit targets to just above profitability. Meanwhile, the rest of our issues, with the exception of NNVC, have been trending higher along with the major markets, and even outperforming a little bit. A lack of news for NNVC is likely to blame for the under performance, and the stock may also be lagging Blue Chips. Thursday, July 8, 2010 2:30PM GSAT has seen weak performance over the past month, however we still believe a lot of upside potential remains. They announced on Tuesday the start of a 90 day launch window for their new satellites, and yesterday they announced further upgrades to a satellite operation center. The stock is trading higher today along with the NASDAQ, and we feel the weakness recently is more of a function of overall market sentiment, and we are not concerned about any support levels being breached. For these reasons, we have lowered our stop loss target to $1.25. We have also lowered our profit target a little bit to $4.15. Our current ultra short term Pink Sheet picks, TRDX, PRRY and KATX are looking very weak, and we will likely be doing the Pink Sheet Shuffle early next week, so be ready. Tuesday, July 6, 2010 9:00AM PLXT, (NASDAQ), was added to the PSD10. Most recent price was $3.93. PLXT was added with a buy target of $3.85, a profit target of $6.00, and a stop loss target of $2.85. Our time horizon for this trade is 1-3 Months. See report below. NEOP was removed from the PSD10 and added to our historical performance log Thursday, July 1, 2010 9:00AM TRDX, (Pink Sheets), was added to the PSD10. Most recent price was $0.055. TRDX was added with a buy target of $0.052, a profit target of $0.105, and a stop loss target of $0.029. Our time horizon for this trade is 1-2 Weeks. See report below. SSWC was removed from the PSD10 and added to our historical performance log Tuesday, June 29, 2010 9:30AM SATC, (NASDAQ), was added to the PSD10. Most recent price was $3.08. SATC was added with a buy target of $2.96, a profit target of $5.45, and a stop loss target of $2.15. Our time horizon for this trade is several weeks to several months. See report below. SUPG was removed from the PSD10 and added to our historical performance log Tuesday, June 22, 2010 6:00PM KEME symbol changed to KEM. The manufacturer of tantalum, multilayer ceramic, solid aluminum, film, paper and aluminum electrolytic capacitors, announced today that its common stock has been approved for listing on the NYSE Amex. Tuesday, June 22, 2010 9:30AM SSWC, (Pink Sheets), was added to the PSD10. Most recent price was $0.0025. SSWC was added with a buy target of $0.0022, a profit target of $0.007, and a stop loss target of $0.0014. Our time horizon for this trade is 1-3 Days. See report below. DSTR was removed from the PSD10 and added to our historical performance log Wednesday, June 16 3:28PM DSTR, (Pink Sheets), was added to the PSD10. DSTR was added with a buy target of $0.005, a profit target of $0.017, and a stop loss target of $0.003. Our time horizon for this trade is 1-3 Days. See report below. ACLH was removed from the PSD10 and added to our historical performance log Tuesday, June 15 3:45PM A surge in volume today along with positive price action in KEME quells our concerns from last week over light volume. The stock continues to look good and is doing very decent volume for an OTC BB issue. Our current Pink Sheet plays, ACLH, KATX and PRRY have seen negative action on decreasing volume. The only one we are really concerned with right now, however, is ACLH. If we do not see anything interesting from the stock by the end of the day, we will likely replace it tomorrow. Monday, June 14, 2010 1:03PM An upgrade of sorts last week from the Motley Fool for PSD10 portfolio stock LTXC has helped the issue significantly. We plan on holding the stock for now, even with the possibility of a reverse stock split that was announced last month. In our experience, when NASDAQ small cap stocks that have been heading north for over a year and are in this price range initiate a reverse stock split in the one for three to one for five range, the stock continues to head north as more investors become available. This is a stark contrast to reverse stock splits more in the one for 100 range seen in sub-penny pink sheets. We may see new buyers a little bit down the road that would not normally touch a stock under five dollars, as well as those keeping an eye out for this type of situation in the shorter term. For these reasons, we have raised our profit target for LTXC from $3.50 to $3.95. Friday, June 11, 2010 2:30PM KEME has seen very light volume today, but it does not seem to be inconsistent with light volume seen in the stock on previous Fridays. We will need to keep an eye on it early next week to see if volume is indeed tailing off. Activity is very light overall today on both the OTC BB and Pink Sheets, and price action is relatively unchanged to slightly negative across the major exchanges as well. In fact, out of all stocks trading below five dollars, right now there are 2,616 advancers, 2,712 decliners and 1,045 issues that are unchanged. We can expect action to pick up early next week, but it is important to note that the summer doldrums are here to stay for a while. Thursday, June 10, 2010 11:05AM Although SONS has been in the portfolio for some time, the overall trend for this stock remains north bound. Also, the last month of trading has seen a consolidation pattern in the stock price that continues to make slightly higher highs and higher lows. We want to see the stock get above 3 dollars before we consider getting out, and we have raised our profit target to $3.25. We will want to keep a close eye on ACLH, as we may see volume completely dwindle in the next couple of sessions. We are monitoring several Pink Sheets as a replacement should the need arise quickly. PRRY announced today that it has agreed to jointly participate with Brownfield REM Corporation in the remediation, recovery and restoration of the water of the Gulf of Mexico as well as the adjoining beaches and land resulting from the Deepwater Horizon oil spill. NEOP is at a key area with respect to both price and volume. A lack of developments over the last month or two has really slowed the activity, and the stock has drifted towards recent support levels. Should support fail, no new developments occur, and if volume remains low, we will likely be removing NEOP in the very near future. Key Recent Activity GSAT, (NASDAQ), was added to the PSD10. Most recent closing price was $1.78. GSAT was added with a buy target of $1.80, a profit target of $4.65, and a stop loss target of $1.45. Our time horizon for this trade is several weeks to several months. See report below. KEME, (OTC BB), was added to the PSD10. Most recent closing price was $2.03. KEME was added with a buy target of $2.00, a profit target of $4.10, and a stop loss target of $1.65. Our time horizon for this trade is several weeks to a month or two. See report below. NNVC, (OTC BB), was added to the PSD10. Most recent closing price was $1.67. NNVC was added with a buy target of $1.60, a profit target of $2.90, and a stop loss target of $1.35. Our time horizon for this trade is several weeks to a month or two. See report below. PRRY, (Pink Sheets), was added to the PSD10. Most recent closing price was $0.58. PRRY was added with a buy target of $0.58, a profit target of $0.85, and a stop loss target of $0.35. Our time horizon for this trade is several days to several weeks. See report below. KATX, (Pink Sheets), was added to the PSD10. Most recent closing price was $0.21. KATX was added with a buy target of $0.19, a profit target of $0.275, and a stop loss target of $0.095. Our time horizon for this trade is several days to a couple of weeks. See report below. ACLH, (Pink Sheets), was added to the PSD10. Most recent closing price was $0.011. ACLH was added with a buy target of $0.01, a profit target of $0.03, and a stop loss target of $0.005. Our time horizon for this trade is several days to a couple of weeks. See report below. JMBA was removed from the PSD10 and added to our historical performance log NGLPF was removed from the PSD10 and added to our historical performance log FLEX was removed from the PSD10 and added to our historical performance log OCLR was removed from the PSD10 and added to our historical performance log DVNTF was removed from the PSD10 and added to our historical performance log EGMI was removed from the PSD10 and added to our historical performance log |
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