Guys, Sorry I've been all tied up and unable to respond to email.
I'll buy Pen at opening, for $2 or less. I don't see this as a long-term investement, as their is cut-throat competition out there. Also, I think these warrants at $6.50 are worthless.
This company has been dismal about spending money on R/D. I've worked with these companies before, and the only R/D they do is in preparation for a sale... co-design with a customer of molds, etc. in preparation for a large-production run. Note last quarter was their largest R/D in at least a year.
I also, think you are right, Druss, about the news probably being related to the CEO's comments in last release about new contracts looming on the horizon. I think that their PowerStream line of products will offer margins higher than this company is used to.
Summary of possible bad news in near future:
* Unfavorable court ruling relating to Touche.
* Financing pulled wrt $6M credit line.
I think the stock (being below book value) has already discounted these items. In addition, the review for the credit line should not begin until end of this month.
Possible good news in near future:
* New, large oem contracts
* Favorable court ruling.
* New financing found with more favorable terms.
I've been stung before by the news not living up to expectations when you see a stock run up. Usually this happens when you have a wide-spread leak of "blow-out earnings" or the like. Many people jump on the bandwagon and run the stock up to way over what the news justified. In Pen's case, we have just a few very large blocks.
I'm in, and will probably regret my breaking my rule of "don't buy at opening on a Monday".
~Mitch~
Thanks for your inputs... |
