Investing In Penny Stocks – Another Beaten Down Stock We Think Could Double by Geo Investing
Over the last two days I have been writing to you about stocks included in our infrastructure screen due to the billions of dollars slated to be spent in the U.S. over the next 5 years to rebuild/improve the infrastructure of roads, building, bridges and the power generation grid.
Most importantly we added Pioneer Power Solution (PPSI:NASDAQ) to the screen, went long and coded it as a GeoBargain. Our members are already up over 20% on it in a span of days.
Mangrove Partners Narrowly Avoids “Extinction-Level Event”
Nathaniel August's Mangrove Partners is having a rough 2020. According to a copy of the hedge fund's August update, a copy of which ValueWalk has been able to review, for the year to August 5, Mangrove Funds have returned -38%. Over the trailing 12-month period, the funds returned -44%. The S&P 500 produced a positive Read More
But today I want to switch gears for a second and discuss a different opportunity in the risky world of penny stocks. Some GeoInvesting subscribers like us to look for penny stock opportunities that are not the stereotypical pump & dumps with bad capital structures and no real operating business, other than a dream they try to sell to investors. We have responded to this task over the past 3 years. A big challenge with investing in penny stocks is that it can take several quarters of the company reporting progress to see a positive response from their shares, only to be driven down on the hint of one piece of negative news.
Our goal is to find the diamonds in the rough that have pulled back due to negative news that will not impact overall growth prospects.
And we think we have found one trading around $0.50 that we feel is poised to more than double.
Shares of this stock have fallen dramatically over the past few months as it became evident that management could not effectively turnaround the operations of a company it acquired in August 2014. This resulted in the company reporting losses since the acquisition, which masked the strong growth of its core business. This February the company announced that it reached an agreement to sell the acquired asset. The company reported Q4 2015 financial results after the close yesterday and only reflected its core business which is doing just fine. Sales increased over 20% and the company was solidly profitable.
We think investors will eventually see this and bid shares up again as we move through 2016 (provided the company continues to grow its core business).
To continue to receive real time research and trading updates on this company and others we are tracking, please consider subscribing to our premium service. If you’re not yet ready, we will be back with more ideas in the future.
Maj, Dan and the GeoTeam