*** ALL *** Updata on AXPL.
Its not late to buy, as it appears. Read the following:
First, we want to review our January stock pick, Amalgamated Explorations.
Amalgamated, traded on the NASDAQ bulletin board under the symbol AXPL
recently rocketed from $6.50 per share Friday, January 17, 1997 to $14.50
per share at market close Friday, January 24, 1997. Judging by the postings
at other online investment sites, it seems everyone has their eye on
Amalgamated. We at RedHotStocks have fielded numerous emailings from our
subscribers inquiring whether we believe the stock is still a "buy" at these
levels.
We profile stocks that are undiscovered and therefore have relatively low
prices (considering for example the value of AXPL's lease holdings and
oilfinding technology versus it's per-share price of $6.50).
If RedHotStocks investors will remember to INVEST and not DAYTRADE, and
demand PHYSICAL DELIVERY from the broker of any shares purchased, we believe
that we can continue to provide reports on great companies that should make
money for everyone.
We are watching the stock closely and have noted a few things:
A. Overall, the stock is steadily trading throughout the day. There seems to
be excellent support at the $10.00 level. Over the last week it has upticked
steadily and sometimes dramatically.
B. Price is maintained even as volume decreases:
252,000 Monday
89,000 Tuesday
28,000 Wednesday
57,000 Thursday
40,000 Friday
We think this means that our subscribers are taking our advice and
demanding physical delivery of shares. Market makers who shorted the stock
in the beginning are finding that there are very few shares out there. This
could push the price up considerably.
C. If you watch trades, you'll see that they are mostly small volumes.
Friday only 40,000 shares were traded but 80 trades were made. That's 500
shares per trade, average. The stock is spread around, so as people sell,
others are buying. The net result is that no one person will move the stock
appreciably.
D. We believe that AXPL will be making an announcement about their
oil-finding technology within the next two weeks (because why would they
ignore this sudden interest in their company? They'd do well even to
re-release old news!). Any positive news should move the stock again.
E. With such a small float, anyone willing to short a stock with such strong
upside potential and widespread distribution would, in clinical terms, be
off his rocker.
The sum of all this: At this point, we rate the stock a "buy" at prices up
to $14. We would hold the stock until the company releases news, and even
then would hold until they make a major announcement like a good contract or
earnings.
Our target? It depends on time. We are convinced of their holdings and
potential. There is now a lot of interest in the company. All sorts of doors
should be open to AXPL now. We would not be surprised to see the stock at
$25 just on short-term buying in the market. Upon oil/gas well completion or
subsequent earnings announcement, the sky's the limit. $50? $100? What if an
analyst initiates coverage? It's a bit of a gamble, but you knew that going
in. These are the kind of companies we like-small, hungry, aggressive.
Second, we came across two news releases from Amalgamated Explorations. The
first was issued Monday, January 20, 1997.
AXPL NEWS RELEASE JANUARY 20, 1997
-----------------------------------------------
Regarding recent market activity in the public stock of Amalgamated
Explorations: The company can see no reason for the recent increased
activity in the trading of its common stock.
The fundamentals of the company remain unchanged.
The company understands that a recommendation has been issued over the
Internet. The company has reviewed the recommendation and has concluded
that said recommendation contains no information that is not public
information as disclosed in the filings with the regulatory agencies or in
the press releases dated Oct. 9, 1996, Nov. 7, 1996 and Dec. 10, 1996.
CONTACT: Amalgamated Explorations Investor Relations
John Vaux, 888/999-8787
The second news release came out this morning on Businesswire. Amalgamated
has secured significant short-term financing to be used in the development
of their electrotelluric survey. The entire news release follows:
AXPL NEWS RELEASE JANUARY 28, 1997
-----------------------------------------------
DENVER--(BUSINESS WIRE)--Jan. 28, 1997--Amalgamated Explorations
(NASDAQ/BB:AXPL) is pleased to announce the closing of its $1 million
private placement.
The funds will be used as interim capital in development of its
newly-acquired oil and gas detection technology, the MSP electrotelluric survey.
The electrotelluric survey uses the Earth's natural electromagnetic field to
detect oil and gas deposits, disclosing the depths of deposits to 17,000
feet. This new patent pending technology is the latest in oil and gas
exploration. Unlike 3-D seismic surveys that only identify potential
hydrocarbon-bearing structure, this technology can detect the actual
hydrocarbon through anomalies in ultra-low-frequency electromagnetic waves.
The survey can be completed in five minutes, gives instant infield results,
and is totally non-invasive. Unlike seismic, there is no environmental
damage from the survey.
For more information about Amalgamated Explorations and the electrotelluric
survey, visit the company's Web page at findoil.com or call
888/999-8787.
Third, we have a special offer for our subscribers. From time to time,
RedHotStocks will form alliances with other investment-oriented services to
benefit our subscribers. The following is an announcement of one such alliance:
SPECIAL OFFER
-----------------------------------------------
RedHotStocks has joined forces with Zacks Investment Research Inc. to bring
you a special offer. Zacks, the leading source of investment research on
Wall Street for almost 20 years, is offering you a FREE 1 month trial to
Analyst Watch, the company's popular on-line research service. As part of
this offer, Zacks will give you a 60% discount off the retail price of a
yearly subscription if you decide to continue receiving the service. For
more information, you may access Zacks' free Company Reports and Earnings
Surprise data at zacks.com or access your free 1
month trial directly at: zacks.com .
Finally, the following is a reprint of an attachment to our original January
17, 1997 recommendation. We feel very strongly about the importance of
demanding physical delivery of any shares purchased. Doing so will help
protect your investment.
PROTECTING YOUR INVESTMENT
-----------------------------------------------
At RedHotStocks, we appreciate and understand the dynamics of the stock
market. However, we do not appreciate nor do we approve of the practice of
undeclared short-selling. The following is an excerpt from an article from
Copley Pacific on that subject. The author defines short selling, explains
the negative effects, and outlines a program to help eradicate undeclared
shortsellers. We at RedHotStocks urge you to read the following and be sure
to demand delivery of your shares.
Understanding Undeclared Short Selling and How It May Be Impacting Your
Company's Stock
Does it sometimes seem that no matter what you do your stock has trouble
climbing in price? If this is the case, your company's stock may be facing
downward pressure as a result of undeclared short selling.
Short selling can be divided into two categories, declared and undeclared.
Many dynamic growth companies have been damaged by undeclared short selling.
Created by market professionals, the practice consists of creating stock
that doesn't exist. It isn't borrowed but created and it creates enormous
negative pressure on a stock price.
The mechanics of undeclared short selling are as follows:
Nonexistent stock is sold short. This nonexistent stock increases a
company's float. The nonexistent stock makes it difficult for investors to
profit from their risk capital speculations. The short sellers make the
profit. The practice hurts the public companies, themselves. It adds massive
costs to maintaining a market in a stock and it reduces a company's business
options.
The basis of declared short selling is borrowed stock. A short seller
provides 50% or more of the value of the stock to his or her broker. This is
done in a margin account. The margin protects the broker against any
increase in the share price. The broker borrows the stock from a depository
trust company. He then sells the stock and adds the money to his client's
margin account. Later, the client buys stock (covers) to replace this
borrowed stock. The difference between the price the client sold the
borrowed stock and the price the client paid to replace the borrowed stock
(covered) is the profit or loss from the transaction.
Most declared short players are institutional money managers and fringe
group market professionals, not small capital public investors who seldom
participate. Declared short positions risk being squeezed. If the company
can double its share price, the short seller will be forced to increase his
margin collateral in order to maintain the short position. At such time, the
short seller may elect to buy (cover) the stock instead of adding to his
margin. This adds to the upward movement of the share price.
Undeclared short sellers don't borrow stock. They don't margin the sale of
their short position. Because they are market insiders they can use various
techniques to sell stock short that doesn't exist.
Is there money to be made by undeclared short sellers? Estimates are that
undeclared short sellers make multi- millions of dollars annually.
Complaints to regulatory agencies haven't stopped the practice of undeclared
short selling. However, one way companies can protect themselves is to
recommend to shareholders that they take physical delivery of their stock
certificates. When physical delivery of stock certificates is demanded by a
significant number of shareholders, the creators of non-existent stock can
be squeezed. The short sellers won't have stock certificates to deliver and
thus they will be forced to go into the open market to buy the stock. This
will cause losses for them and will cause them to move their undeclared
short activities elsewhere.
For other ideas on battling professional short sellers, contact Ray Bary at
the financial public relations firm of Copley- Pacific at (214) 702-7009.
///////////////////////////////////////////////////////////////////////////
For more information about Amalgamated Explorations, please contact
Amalgamated Investor Relations, at 1-888-999-8787 or visit Amalgamated's web
page at findoil.com .
///////////////////////////////////////////////////////////////////////////
This update will be available to the public on January 29, 1997 at
redhotstocks.com .
///////////////////////////////////////////////////////////////////////////
Copyright (c) 1997 by RedHotStocks. ALL RIGHTS RESERVED.
Members of the media may reprint any portion of this publication, at any
time, provided full credit is given to RedHotStocks and our Web address,
redhotstocks.com, accompanies any reprint. RedHotStocks is a
service for investors seeking information and ideas not readily available
from most brokerages or research services on some of today's hottest growth
stocks. By presenting insights on undiscovered, high-potential growth
companies, RedHotStocks provides investors access to opportunities often
overlooked. Commentary and opinions made by RedHotStocks in any issues of
this publication reflect only RedHotStocks views and may be in conflict with
the views or official news of the companies reviewed, featured or mentioned.
RedHotStocks does not contain a complete description of securities, markets
or developments referred to herein. RedHotStocks' commentary, remarks or
opinions are subject to immediate change without notice and may not
necessarily be reprinted in future RedHotStocks editions or elsewhere.
Neither RedHotStocks nor anyone affiliated with RedHotStocks guarantee
completeness, adequacy, accuracy or reliability in any of the information
contained in any of the publications. Past performance does not necessarily
indicate future success. This material is not an offering or solicitation
for the purchase or sale of any service, security or commodity. RedHotStocks
is neither an investment advisory service nor an investment advisor.
Investors should always check with their licensed financial advisor to
determine the suitability of any investment. Investors should obtain annual
reports and other company information to complete their own due diligence in
any investment. Neither RedHotStocks nor anyone affiliated with RedHotStocks
is responsible for any investment decision made. RedHotStocks tends to
feature/review companies which many consider to be: (a) high-risk, volatile
and extremely speculative investments; (b) companies which are highly
promotional in nature; (c) companies which do not produce revenues or
earnings. All investors are encouraged to fully investigate any stock before
making an investment.
/////////////////////////////////////////////////////////////////////////// |
