I took a speculative stake in PENC at 2 1/4 today, and noticed there was no thread for it on SI. Well, here we go. I added the "ready to fly" onto the title to
stimulate interest.
I don't know a great deal about the Co., but it has traded as high as 3 3/4. It has been declining recently, while revenues shrunk last Q. Not too pretty at first
glance. However, read up and you'll find they've been relocating production facilities to China, thereby saving on margins. The costs of this transition has hurt them,
but will benefit the stock in the long run. In the meantime, today they were awarded a $12,000,000 contract from L3 communications.
With only 3 million shares outstanding, the contract is almost double their current market cap. With only 1 million shares in the float, this turn around situation could
cause this stock to fly. Today's contract will certainly boost revenues significantly, and with their transititory phase complete, margins should be better than ever.
Of course, the further hope of any incoming investor will be that today's contract signals a change of direction that will continue and create a healthy turn around
situation. Today's contract made Pen Intercom undervalued at today's price; any further positive developments will make this stock a huge gainer from current
levels, IMO.
Disclaimer: I currently have a long position in this stock, and I'm no expert as I only discovered it today. Don't buy it without doing your own due diligence.
Because it is volatile (low float) and so damn cheap, I've only invested speculative money in it.
Any thoughts, folks? |
