ZerO's kleine Spam Stock Ecke

Hier packe ich mal all die Infos rein, die garnicht so uninteressant klingen die ich so aus der ganzen Welt täglich in mein Postfach gesendet bekomme. Teilweise sind ja äusserst hübsche Kaufbegründungen dabei, wie z.B. diesen Wert muss man einfach ins Depot nehmen, denn schliesslich ist der Wert schon 580 % gelaufen ... etc ;o)

Alle anderen können hier auch Ihren Stock-Spam reinpacken. Vielleicht ist ja mal eine Hikari ( Harakiri ) im Anfangsstudium bei die bei Veröffentlichung noch garnicht gelaufen ist ....

your money. You see, San Telmo is developing a total of 9 oil and gas projects in a part of Canada that’s known for huge reserves. And if those 9 wells contain the oil that recent preliminary tests show they have, it could launch San Telmo from a miniscule company to a mid-sized producer in a matter of weeks.

That’s why The Reaper is so high on San Telmo.

There’s no question the U.S. is very interested in Canadian energy. Oil exports from Canada to the U.S. have increased from $16 billion in revenues in 1998/1999 to over $28 billion in 2000/2001 (this is extremely bullish for San Telmo Energy)!

To top that off, on a recent trip to Calgary the U.S. ambassador to Canada, Paul Cellucci, said “we want to be less dependent on Venezuela…we want to be less dependent on the middle east.” No doubt that’s a sure-fire recipe for a dramatic bull market in oil & gas stocks, especially those that operate in Canada.

But that’s only half of the story.

You see, the real reason R.E. is so excited about San Telmo Energy… and San Telmo exclusively, is because they’ve assembled a dream team of management and geologists. They’re considered by many in the industry to be the best in the business at finding huge oil reserves in Canada.

One of the geologists, Dr.Marc Villeger, was a founding member of Peyto Exploration. If you’ve never heard of Peyto Exploration, pay attention.

Peyto was a tiny oil and gas exploration stock that was trading for just $0.16 a share in 1998. Then Marc Villeger made a huge find of oil. Today, Peyto trades at a market valuation of $375 million, or $13.25 a share. Early investors saw their stock increase 8,186% in just 5 years.

That’s not pie-in-the-sky numbers. That’s cold hard cash. And San Telmo is about to do the same thing.

As you read this, Marc Villeger and his crew are about to drill the Nisku Pinnacle Reef project. Like I said earlier, preliminary tests of the wells at Nisku show potential for 2 to 8 million barrels of oil. And Marc’s success rate in the area is incredible.

He’s already discovered six wells there.
How much is the oil worth? An estimated value of $60 to $100 million.

With that size discovery, shares of San Telmo could jump to $5 almost overnight.

You’re about to learn more about the Nisku property, in addition to the other 8 properties San Telmo is developing.
But first, let me tell you more about The Reaper. R.E.McMaster, editor-in-chief, has for years brought readers highly profitable investment advice in the pages of The Reaper.

How profitable? Last year, you could’ve made 400% following R.E.’s advice. Now, before you dismiss him as another newsletter editor who’s constantly saying what you “could’ve done” with this stock or that stock, I’m going to do something unheard of in this business: I’m giving you his most promising stock for the year, for free.

That’s why the enclosed report features San Telmo Energy.

You see, in the forecast issue for 2003, R.E. made 7 predictions on how investors like yourself could continue to make a ton of money while the Dow and NASDAQ continue to sink like a stone.

The #1 prediction was that crude oil was about to skyrocket before our eyes because of the likely war with Iraq. That prediction is coming true as you read this. Oil prices are now sitting at 2-year highs… and are expected to go even higher. Pretty impressive. And I think you’ll be very impressed indeed at what you read in this report.

But before you even consider becoming a member of this profitable service, I urge you to read the report on San Telmo Energy.

After you’re done, I think you’ll agree with me that San Telmo Energy offers what might be a rare opportunity to make money in something real—oil!

Sincerely,


Ron King
Publisher, The Reaper

Amnis is a pioneer in the technology of delivering video over any kind of broad band network. In a safety and cost conscious world, there has been an explosion of demand for video solutions which mitigate the need for expensive, wasteful, and dangerous travel.

Amnis is widely accepted as having the best real-time video solution available. Applications include remote training and class room environments, video surveillance for security purposes, and remote robotics control.

Amnis systems power virtual classrooms for the University of Hawaii, University of Alaska, Hughes, Pfizer, Daimler Chrysler, and many others. In a highly publicized demonstration, Bell Canada provided a video network over which robotics surgery was remotely performed by a doctor in a different location from the patient. Amnis systems provided the real time video stream over which the surgeon was able to perform the surgery.

Attack drones are remotely flown using Amnis video technology where a real-time video image in mission critical, as with remote robotics surgery. Traffic is monitored from a remote location by the police department in the City of Suzhou, China. There are over 4,000 Amnis systems installed world wide. I am told Amnis has the only system with no latency, meaning the video delivery is in real time with no jerky appearance or delay.

The "many to many"Amnis solution proves a perfect solution for a virtual class room environment. The University of Hawaii uses the Amnis system extensively to create virtual class rooms throughout the Hawaiian islands. I am told the virtual environment is akin to being in the same room. Conversations happen in real time as if the participants were standing next to each other.  

Pictured here are the components of the Amnis network. The broadband connection can be provided in many forms- the internet, intranets, VPNs, T1's, etc. The video quality delivered by the Amnis technology is second to none. If you're wondering- the word "Amnis" is latin for "Streaming".
  Amnis- The Potential For the Stock  




Here's the big picture on the history of Amnis. As you can see, in early 2002 Amnis was a very hot stock. On the heels of major contract announcements, the stock charged from the $.50 level to a high of $1.75. The stock traded nearly 14 million shares in one day. Investors had high hopes for the future as video streaming was identified as a market niche with huge growth potential.  

The company recently completed an additional round of financing for $1 million. A new President has been installed. Former management has been shown the door. Two turn around specialists are now consulting at the company on a full time basis, laying the groundwork for future fiscal growth and health.

Today, Amnis announced two new contracts on the same day the "E" was removed from the symbol. Amnis announced new systems have been purchased by the South Korean military and an undisclosed US Federal Agency.



A more current chart helps set up reasonable expectations for a rebound in the stock. The stock has collapsed from the $.50 level over the past nine months. In light of new management, new capital, new orders, and current SEC filings, I believe the stock is entitled to recoup 50% of the losses experienced in this downtrend, especially if new orders continue to materialize. Therefore, I believe this stock has the potential to rebound into the $.25 range.  

The annual revenue run rate of the company is about $2 million. There are 100 million issued and outstanding, giving the company about a $6 million valuation based on today's trading range.

Taking into account the quality of their technology, the installed customer base of over 4,000 systems, and the high caliber of their clients, I believe the company has significant growth opportunity.

Therefore, here are the parameters for the first trade on Amnis Systems on the strength of a potential turn around in the making:

Buy AMNM up to $.10. Don't forget to use a limit order.
Target price over the next 60 days- $.15- although there is potential for a rebound to $.25, a more moderate price target of $.15 is set pending sales getting more traction.
Stop Loss- $.05- A pullback is highly unlikely, but nevertheless you have to control loss potential. For the high risk end of your portfolio only.

( Dieses empfohlene Papier ist eine halbe Katastrophe .... das Teil ist bereits auf den Pink Sheets ... aua aua  - bloss von sowas die Finger von lassen, noch schlimmer als OTC-BB Werte ... )

Stock Watch posts volume alert for PITK

Stock Watch has been following Preferred Internet Technologies (PITK).
For the past two weeks, volume in the stock has been setting records
and the stock is gaining ground as rumors of increased business activity
have been circulating.

Yesterday PITK announced that it has letters of Intent to acquire
three companies which together could bring a net profit of more
than $2 million into the company. This press release seems to
substantiate the rumors of big plans for growth.

The stock has also tested the high water mark for volume
today. Very active recent trading history combined with positive
news yesterday could yield record trading volume today for PITK.

The Stock Watch Advisor

The U.S. House of Representatives recently approved legislation authorizing a national nanotechnology research and development program.  This three year spending plan totaling $2.36 billion will help fuel this industry and give birth to scores of new companies.  Now that the money has been budgeted the next step is to appropriate the funds.  The setup is reminiscent of how government organizations such as the National Institutes of Health (NIH) provide grants to biotechnology firms.

This is not the first time the government has opened its checkbook for nanotechnology.  Just last year the Army awarded The Massachusetts Institute of Technology (MIT) a $50 million dollar contract. MIT began research on subjects such as conductive polymers, germ resistant fabrics and enhanced medical sensors.  MIT and Army officials unveiled their new Institute for Soldier Nanotechnologies: a 28,000-square-foot facility that marshals government, academic and industrial resources to develop a new generation of equipment the average soldier will take into combat.  The goal is to utilize nanotechnology in creating a super soldier that could become invisible, leap over walls, and treat their own wounds.

"If you want to visualize the impact of nanotechnology, think about" the movie "Predator," U.S. Army Chief Scientist Michael Andrews told Reuters. "It's about the ability to have a uniform that protects you totally against your environment."  This predator, until he took his uniform off, he was the meanest SOB in the world," Andrews said. "Nobody could kill him. That suit is science fiction, but it portrays what might be possible."

Market Potential

The National Science Foundation projects that the nanotechnology industry will grow into a $1 trillion dollar business in the next 10 to 15 years.  Corporations have already put their big toe in the water and it is a matter of time before they take the plunge.  During the internet boom the big boys played catch up and allowed companies like Amazon.com (AMZN), eBay (EBAY), and Yahoo (YHOO) to become the dominant players.  The same may not happen with nanotechnology as some of the world's largest companies are already deep into this industry.

Here are just a few of the new innovations that we may see in the future:

General Electric (GE) is working on lighter and cheaper aircraft parts, more efficient medical imaging, and materials with better heat management for devices such as cell phones.
Daimler Chrysler (DCX) has already installed "Conturan" glass which had an ultra thin layer of anti reflective coating.  This may not be that exciting but what does sound very sci-fi is that the company would like to produce a car capable of changing colors.  A nanoparticle coating and an electric field would allow a driver to change the color of the car according to his or her mood.
DuPont (DD) is working on toilets, sinks, and tubs that would be self-cleaning.  The ceramics would be coated with nanoparticles that prevent dirt, grime, or other unwanted substances from binding.
There are plenty more examples but we will stop at the self-cleaning toilets.
So Now What?

Despite the fact that the large multinational companies are into nanotechnology there will be plenty of opportunities to make money.  The obvious question is who are these companies and what are their stock tickers.  The SmallCap MarketWatch has the names of nine companies that are publicly traded and involved in nanotechnology.  In the next few weeks we will conduct our proper due diligence and report the findings to our readers.

If any of our readers have nanotech companies they are familiar with be sure to let us know at editor@smallcapmarketwatch.com and we will add it to the list if they qualify.

Entremed & Corvas Identify New Target for Treatments of Cancer and Other Diseases

Shares of Entremed (ENMD), one of our ASCO basket stocks, had a terrific week closing at $4.65 per share.  That is a gain of 36% from when we published about the company in our May 29th edition at $3.42 per share.

The company, along with its collaborator Corvas (CVAS), published preclinical findings demonstrating that the growth of primary and metastatic tumors in animal models was prevented when scientists blocked the activity of a naturally-occurring complex of two proteins that activates blood clotting (tissue factor and factor VIIa).  This discovery may allow for development of new therapies that have antitumor activity without affecting the vital processes involved in normal blood clotting. The collaborative study is featured in the June 1st issue of Cancer Research, a scientific journal published by the American Association for Cancer Research.

Xenova Continues To Impress

We finally found out why shares of Xenova (XNVA) have been on a tear.  The company announced the signing of a significant, two-year manufacturing, development and clinical supply agreement with Pharmexa A/S for the contract manufacture of clinical supplies of a vaccine targeting the human HER-2 protein. Manufacture will take place at Xenova's Clinical Trial Manufacturing Facility in Cambridge.

Since we first featured the company in our May 27th edition, British Biotech Worthy Of Attention, shares of the company have gained a high of $2.18 and closed Friday at $2.03 per share.  That is a gain of 26.8% from our original mention at $1.60 per share.

The company has developed a revolutionary method for capturing the kinetic energy lost in the vehicle braking process.

It works as follows: When you apply the brakes in a SHEP fitted vehicle, the Ifield Pump grabs the drive shaft. The spinning drive shaft turns the pump, and it stores the energy in a hydraulic storage tank as the vehicle slows.  

When accelerating from a stop, the electronic control systems instructs the built up pressure to turn the pump, and the pump turns the drive shaft until the pressure is dissipated. The engine then takes over. Visit SHEP's corporate web site at www.shepinc.com for a virtual demonstration.

In a joint development program with SHEP, and after two years of experimentation using a "proof of concept" Lincoln Navigator, OEM Ford Motor and Tier I supplier Eaton Corp determined the SHEP system (stored hydraulic energy propulsion) was able create:

38% improvement in fuel economy.
32% faster acceleration from a stop.  
51% less pollution.  
77% longer brake life.
When one considers the long term commercial applications for this technology, combined with the profit model for licensing its use in the automotive manufacturing world, there is incalculable upside potential.
Therefore, I felt any investor with capital for a high risk/high reward situation should own shares in SHEP Technologies. I originally recommended you should be prepared to be "involved" with this company for at least two years to maximize your potential for a big win. You can always trade around a core position if you choose, but this is a long term situation.

I don't expect commercial deployment of the system to come this year, and therefore I don't expect the company to generate any revenues this year. However, I do expect that from time to time the company will be able to announce progress benchmarks, and the market believes one of these benchmarks is now on the horizon.
  SHEP Technologies (OTC BB: STLOF) Announces Intention To Apply for "AIM" Listing  




Just after the market closed yesterday, SHEP Technologies announced the company intends to apply for a listing on the "AIM" London Stock Exchange. The AIM (Alternative Investment Market) is London's version of the NASDAQ Small Cap/ Bulletin Board market. According to the press release, $11 billion has been raised for the 850 companies which trade on the AIM exchange since its inception in 1995.

At first blush, this announcement doesn't seem to have enough horsepower to explain a major 68% breakout in the stock on huge volume. However, sophisticated investors who understand the AIM market may be reading more into the news.

The announcement goes on to specify SHEP has retained a accounting firm to apply for a special tax status which makes an investment in SHEP Technologies very attractive to investors due to certain special tax advantages established by UK tax laws for companies in this category.

Based on today's performance in the stock, I believe the market has made of leap of faith that the AIM listing will lead to a significant financing for SHEP Technologies. This would be another factor which would help mitigate the risks associated with ownership in the stock.

I have not strayed from my initial suggested trading strategy for this stock. Take 10% of your high risk investment capital and allocate it for SHEP. Invest 25% of that allocation if you haven't done so already. Don't worry about the ups and downs of the share price. If this company succeeds, it will cost you more to be out of the stock.

Fund managers took a look at the company, and decided the problem was management, not technology. In early May financiers stepped up to the plate with new capital of $1 million and brought in a new CEO.

Since that time, the stock has rebounded to a high of $.125. The company has announced new product sales. Overhead has been slashed dramatically. Today the company announced nearing a new product introduction for the first time in several years. They expect sales for this new product to begin next quarter.

If new product introductions are followed with more new product sales, investors will take a leap of faith that the worst is behind, and this exciting technology will have the opportunity to grow and mature.

The stock has retraced almost exactly 50% of its run from $.06 to $.125. As long at the uptrend remains intact, this represents an ideal entry level. If you don't have this one in the high risk end of your portfolio, now would be a great time establish a position and wait for product sales announcements to take the stock higher. If and when we get to $.15 we can reevaluate, and decide if we should be looking for $.25.

Publicly traded venture capital funds are valued according to how much their holdings are worth.  The problem is without a public market to determine the true value of each portfolio company it is impossible to be precise.  However, at $6.73 per share the stock is considerably higher than what Harris & Harris considers their portfolio Net Asset Value  ($2.26 per share) to be.  We included this stock in our basket because if the IPO window ever opens for nanotech stocks then the upside to TINY will be huge.

Flamel Technologies (FLML) has one of the prettiest charts we have ever seen.  Too bad we didn't discover the company until now.  Flamel is a biopharmaceutical company engaged in the development of two polymer-based drug delivery platforms. The company's Micropump® and Medusa® technologies are involved in fifteen different development programs with eight different collaborations of which five are in clinical phases.  The company's partners include Merck (MRK), GlaxoSmithKline (GSK), Biovail (BVF), and four other nondisclosed parties.

The science involved in Flamel is absolutely incredible.  Currently patients take medication the usual "four times a day" but Flamel's Micropump creates microparticles that prolong the delivery of drugs in the small intestine making it possible for once daily dosing.  Imagine just one dose per day versus four with the same benefits.  The large pharmaceuticals are in desperate need of this technology and for good reason.  Patent expiration issues are forcing drug companies to innovate in hopes of protecting market share.  Reintroducing the same drug with a new delivery mechanism is one of the ways to do this.  Shares of Flamel closed at $12.05 per share and are up about 600% in the past twelve months.  Wall Street coverage is virtually nonexistent because it is a French company that obviously does very little investment banking here in the states.  Flamel stands to reap tremendous benefits from its partners off royalty payments once drugs start to receive FDA approval.



JMAR Technologies (JMAR) is included in the basket mainly because of valuation.  Shares closed yesterday at $1.26 per share giving the company a $30.2 million dollar market cap.  Sales for 2003 are expected to be in the range of $23 million and JMAR previously announced a $34.5 million dollar contract with the Department of Defense so there is a nice backlog of revenues.

The company is the originator of Collimated Plasma Lithography (CPL), a next generation lithography alternative designed to deliver affordable, sub-100 nanometer chip making capability in a compact format to the semiconductor industry. Its microelectronics division provides process integration and maintenance support for the U.S. Government's Defense Microelectronics Activity semiconductor fabrication facility.

This past year JMAR unloaded a money losing division but has made up for the lost revenue by increase in contract funding for its CPL Program.  If CPL continues to gain momentum then the company could be close to profitability in the near future.

Nanophase (NANX) engineers and manufactures nanocrystalline materials on a commercial scale (product list).  The nanomaterials are currently used in sunscreens, personal care formulations, abrasion resistant floor coverings, and catalytic converters.  The company is also developing several new emerging applications for nanocrystalline materials in multiple markets.  Nanophase was included in the basket because the company expects revenues of $3 million in the first half 2003 and more in the second half of the year.

Revenue is important because it validates that the company has something that customers will pay for.  Nanogen has passed the proof of concept stage and now needs to close large scale clients to win over investors.  The stock closed yesterday at a hefty $5.34 per share equaling to a market cap of $81.1 million.  Shares have gained 85.38% since May 1 and there are very few levels of support for the stock until the high two dollar level.  Waiting for a pullback makes a lot of sense on this one.

Nanogen (NGEN) was a company that initially attracted us because it traded under its cash value of $1.71 per share ($36.9 million) for quite some time.  Now at $3.54 the shares are considerably more expensive and subsequently much riskier.  Cash burn is per quarter is approximately $8 million but management is already trimming costs and bringing the losses down.  On the bright side, revenue has increased every year with 2002 bringing in $17.17 million.

The company is included on our nanotech basket because it has a large following and often trades well when the sector gets attention. In addition, the large cash coffer keeps the doors open for a long time. Nanogen hopes to establish its NanoChip® Molecular Biology Workstation and NanoChip® Cartridge as the standard platform for the detection of genetic mutations and is also developing its technology for forensic and biowarfare applications.

Westaim (WEDX) was brought to our attention by quite a few Canadian readers.  This company offers an indirect way to play nanotechnology because of its ownership in Nucryst Pharmaceutical Corp. Nucryst invented a nanocrystalline technology called Silcryst which is used in its wound dressing product called Acticoat.   The company has deconstructed the structure of silver and rebuilt it with smaller crystals, which the body can absorb faster.  Since its pure silver it also kills bacteria without damaging human tissue.

Our favorite stock in the nanotech basket has to be Westaim.  The company is sitting on $95.7 million in cash and cash equivalents while the stock closed yesterday at $1.65 giving them a market cap of $128.8 million.  Revenue for the most recent quarter ending March 31 was $16.66 million with Nucryst accounting for over 40%.  Losses came in at $984,000 for the quarter but it's possible for the company to reach breakeven very soon.  If Nucryst was ever spun off it would probably be worth more than Westaim as a whole.

That concludes our edition on nanotechnology and as an added bonus we decided to list the support and resistance levels for the stocks in the basket.  We look forward to reading your comments which may be sent to editor@smallcapmarketwatch.com.



 

Biomira (BIOM) announced last week that the results from their pivotal Phase III trial of Theratope for metastatic breast cancer patients did not meet the two pre-determined statistical endpoints of "time to disease progression" and overall survival. However, one subset of patients (approximately 32% of study patients or 330 patients currently on hormonal treatment following chemotherapy) appeared to show a trend to survival (a several month difference seen between the control and treatment group). Over the next 3-5 months, the company plans to complete a further analysis of this subgroup, with the intent of discussing the results with regulatory agencies, to pursue a registration.

Biotech stock prices are more events driven than any other sector.  When companies like Biomira announce that they failed a Phase III trial the relentless selling causes emotion to take over reason.  It becomes "get out of this stock at any price" mentality and savvy traders can really take advantage of the situation.  The fact that Biomira is partnered with Merck KGaA of Germany, a multi billion dollar company, means that Theratope must have shown some benefits that were compelling.

There are three paths for Biomira's Theratope and they rest on data obtained from a subset group which were women on hormonal treatment following chemotherapy.  The subset data could be deemed acceptable for registration, with a post registration confirmatory study to be conducted.  The second best case would be for another study to be conducted.  The worse case obviously is the company decides that the data does not warrant further development.  If either of the first two occurs then the stock could experience a quick pop.


Charts Courtesy Of StockCharts.com.

Biomira closed last Friday at $1.70 per share giving the company a market cap of $92.2 million.  There is approximately $33 million or $0.55 per share in cash.  The burn rate is estimated to be $1.6 million per month so Biomira's cash position should last the company till the end of 2004.  There is support for the stock at $1.48 all the way down to the 200 day moving average of $1.34 per share.  There are no real lines of resistance until the two dollar levels.

On Monday Dr. Alex McPherson the current President and CEO of Biomira will be participating in a panel discussion at the upcoming Biotechnology Industry Organization (BIO) meeting in Washington DC.  BIO describes itself as the world's largest biotechnology convention and this year President George W. Bush will be speaking on June 23 at 12:45 p.m.  Biotech may be back on the burner after a breather for the past week.  It would make sense for companies to make announcements this week to coincide with BIO much like the cancer companies did at the American Society of Clinical Oncology (ASCO) annual meeting.

Biomira has proven to be a good trading stock with little institutional shareholders and mostly retail activity.  We will be tracking the company closely for the next few days in hopes of finding an entry level we are comfortable with.  Ideally an entry point of $1.50 per share with a stop limit at $1.38 would be something we are looking for.

NBA Basketball

Unfortunately none of our readers correctly guessed the correct score of last week's final between the San Antonio Spurs and the New Jersey Nets.  However, due to the overwhelming number of submissions we received this may be something we do again next year.  Loyal Spurs fans pointed out that the last time the team took home the championship the S&P 500 gained 21.04% for the year.  Let's hope for something similar in 2003.

Irvine Sensors is developing a special version of the miniaturized camera you see pictured here in a special program for the U.S. Army's Research, Development and Engineering Command CERDEC Night Vision and Electronic Sensors Directorate. This is a Phase II award, meaning Phase I was successful, and commercialization is coming closer to reality.

The camera will be used for night vision weapons sites for infantry weapons. Because of the super computing component, the camera is very small, lightweight, and doesn't require the enormous power and cooling current infrared sites require. Once implemented, this infrared camera will reduce the weight and size of night vision weaponry considerably. Note the key sitting next to the camera for size comparison purposes.

This represents just one of many new technologies the military is developing with Irvine Sensors' technology.
  Perfect Entry Level- Right on the Trend Line  




As you can readily see in this 90 day chart, Irvine Sensors dropped the last couple of days in conjunction with the market's long overdue correction. It has dropped to the perfect entry level, right on the uptrend or support line. The stock will undoubtedly rebound from here on this news, and a break above the $2.13 level would put us into new high ground and be extremely bullish.

The stock is also at the lower end of its support/resistance channel, suggesting today's closing level is favorable for those who like a lower risk entry point.

I believe the stock has a shot at breaking above the previous high of $2.13 if the market continues trending higher and the company can deliver a few more fundamental developments over the next thirty days.  

This last time I called a Trading Alert on this stock was April 23rd at $1.19. The subsequent trading high of $2.13 represented an 80% gain over the ensuing thirty days. I'm hoping for an encore performance and like our chances from here.  

You should read our original presentation on Irvine Sensors if you are not familiar with the company. Click Here ( www.otcjournal.com/archive/listserv/20021217-1.html )to read the original profile.

Here is the complete text of today's press release for your review:
 

Press Release Source: Irvine Sensors Corporation
Irvine Sensors Developing Enhanced Night Vision Sensor

Monday June 23, 4:19 pm ET

Recent Awards Included $1 Million to Increase Resolution of Camera System

COSTA MESA, Calif., June 23 /PRNewswire-FirstCall/ -- Irvine Sensors Corporation (Nasdaq: IRSN, BSE: ISC) announced today that approximately $1 million of the aggregate value of contracts announced on April 23, 2003 is from the U.S. Army's Research, Development and Engineering Command CERDEC Night Vision and Electronic Sensors Directorate for the development and delivery of enhanced resolution versions of Irvine Sensors' miniaturized infrared cameras. The new contract is a follow-on to a Phase 2 Small Business Innovation Research award under which the Irvine Sensors' first generation camera was successfully developed last year. While the Army's primary interest in the camera technology is for use in a miniaturized, night vision weapons sight for infantry weapons, the new contract also involves delivery of several units for testing as helmet-mounted sensors for firefighters. Federal funding for the fire fighting application was due in large part to the strong support of Congresswoman Loretta Sanchez (D-CA), Congressman Chris Cox (R-CA) and Congressman Curt Weldon (R-PA).

Irvine Sensors' proprietary infrared camera technology is based on the use of stacked memory chips that store pre-calibrated sensor performance characteristics for a wide range of expected operating temperatures. Such an approach avoids the necessity of cooling the infrared sensor system, with corresponding reductions in camera volume, weight and power requirements. Irvine Sensors recently received two U.S. patents on its infrared camera technology, including one covering the fundamental approach of pre- calibration.

"We have already demonstrated a miniaturized, battery-powered infrared camera with extended operating lifetime that works by exploiting the capabilities of our chip-stacking technology. This latest funding is intended to further refine the operational features of that camera. In addition, by opening up an avenue for commercial application through firefighters, it potentially broadens the support base for this technology. We believe that multiple uses could lead to higher volumes, lower costs and corresponding benefits to both military and commercial customers," said Robert G. Richards, Irvine Sensors' Chief Executive Officer.

Irvine Sensors Corporation, headquartered in Costa Mesa, California, is primarily engaged in research and development related to high density electronics, miniaturized sensors and cameras, optical interconnection technology, high speed routers, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This news release may contain forward-looking statements based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will" and variations of these words or similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, the potential application for and success of our technology that is the subject of this contract and speak only as of the date hereof and are subject to change. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors.

Important factors that may cause such a difference include, but are not limited to, general economic and political conditions and specific conditions in the markets we address, including our ability to successfully enhance our camera product to meet the specifications of potential military and commercial customers; our ability to successfully commercialize that product; our ability to raise additional capital; our ability to negotiate appropriate strategic relationships; our ability to control costs and expenses; and the general economic slowdown in the technology sector and semiconductor industry. Further information on Irvine Sensors Corporation, including additional risk factors that may affect our forward looking statements, is contained in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and our other SEC filings that are available through the SEC's website ( www.sec.gov ).
--------------------------------------------------
Source: Irvine Sensors Corporation

I have no idea why the stock has been on such an exciting tear. There is nothing going on behind the scenes that I am aware of. The recent announcement that the company plans to apply for an AIM listing on the London Stock Market doesn't seem to have enough fuel for this fire. This move may have been the result of a short squeeze.

I'm looking for more information in the near future concerning an investment banking relationship in London and a potential long term financing. When the news comes, I'll deliver it right away.

In the interim, let's wait for a more favorable entry level to add to the position. Regardless of whether this stock goes up or down from here, it is certainly on the radar screen of thousands of investors, which should lead to a very favorable valuation if and when the company delivers corporate performance.

In fact, Bill Gates said the following about StockGroup: "The Stockgroup solution allows us to continue to be a leader by providing our users with the latest up to date financial news, while providing the most cost effective solution," Bill Gates, Microsoft Chairman and Chief Software Architect. (Nov. 2002)

Despite all these positive developments, StockGroup's shares have been stuck in the mud, trading between the $.25 and $.30 level for four months.

It seems to me that everyone wants to buy stocks when they are hot and moving up. No one seems willing to just accumulate shares when the stock is trading quietly, with an eye towards selling when everyone is buying. If you had used this strategy and bought SHEP Technologies two weeks ago when it was trading quietly and no one wanted it, you could have watched the stock appreciate 300% in two weeks, and been in a position to take a substantial profit.
  Undervalued As Compared To Its Peer Group  


As compared to the stocks listed above, I believe StockGroup should be trading at about $.42. >From today's closing price, that is a 50% return on invested capital, if and when the stock appreciates to the equivalent level of its peers. The table below provides all the comparisons you need to make your own evaluation.

I don't know what event will kick this stock into high gear, but I didn't know what would do it for SHEP Technologies. It just happened. I know StockGroup is growing (about 50% annually), I know their balance sheet has improved considerably, and I know the Associated Press relationship gives them extraordinary potential for accelerating growth.

Why not invest in shares of StockGroup while it continues to be stuck just under the $.30 level? Then, when the stock finally breaks out, runs up the charts, and everyone wants it, you can be the seller for once.

Here is a table with the comparisons you need. Review, and let me know if you believe StockGroup is probably worth $.42 per share as compared to it peer group today. If you agree, drop back and punt the stock into your portfolio.

kann ich leider die Chartgrafiken nicht mit bei packen :( Sorry !

Regardless of what happens, there will be individual stocks that continue to do well. Here's one that's likely to continue moving to the upside:
  StockGroup Technologies (OTC BB: SWEB) - Analyst Says Company Is At Low End Of Range  




I was hoping our members would get a chance to accumulate shares of StockGroup as it held below the $.30 mark. In this past Thursday's edition (click here to read), I pointed out the stock was undervalued as compared to its peer group.

The opportunity to pick the stock up while it remained cheap was sabotaged by Investrend Analyst Ryan Fuhrmann. In a news release which came out early Friday morning, he published the first Investrend update on the stock in quite some time. SWEB ended up trading 1.3 million shares (the highest single volume day in two years) and closing at $.34 after making an intra day high of $.38, up net 17% on the day.

On Monday there will probably be strong follow through as the Investrend update gets circulated. I published a price target of $.42 on SWEB, assuming it became fairly valued as compared to its peer group.

Apparently, the analyst at Investrend does not agree. They have a price target on the stock of $.55 to $.65 and a "Speculative Buy" rating. Fuhrmann describes the stock as "trading at the low end of a comparable price to revenue multiple".

In light of this update, perhaps we should raise our expectations for the stock. Like myself, Investrend is looking to possibly upgrade the price target. In the news release Fuhrmann states "a target valuation and earnings model will be provided following the company's next earnings announcement."

There is still a 27% return left in SWEB when it hits the initial target of $.42. If the stock achieves the bottom of the Investrend projected range, there is a 66% move left.

A break through $.38 on Monday would be very bullish for the stock. This would be a new 52 week high.

Here is the complete text of Friday's news release for your review. There is some excellent information contained therein. After reading, decide for yourself if you want to target $.42 or $.55. You make the call.

StockGroup (SWEB)- featured last September at $.19, now $.34 (up 80%)
Family Room (FMLY)- Clobbered in February down from $.40, but since then off the low of $.07 to $.13 (up 85% since the bottom)
Amnis Systems (AMNM)- Introduced June 3rd at $.07- Now $.10- (up 43%)
XML Global (XMLG)- I view this one as a failed idea. Nevertheless, the stock rebounded from $.03 to $.09 in May and June. 300% return for the agile trader.
In recent weeks I have been looking at a lot of very low priced stocks. Call them microcaps, nanocaps, or penny stocks. These are companies that have survived the last three years, trading at very low historical prices, with a high probability for appreciation. I've even found one company generating about $200,000 in positive cash flow per quarter, currently trading at $.015.
Finding $.05 stocks that will be $.25 in the next six months is like shooting fish in a barrel. If they ain't dead yet, they ain't going to be- but they were priced as if they were dead. One or two might even find their way back to $1. One or two will probably still fail.

Look for some penny stock ideas in July as the market digests some of the 2nd quarter gains in larger cap stocks. There are a surprising number of microcap companies doing well, and their stocks will rise with the tide.

Members' Forum- Comments On Selected Stocks You Have Written About







  Level 3 Communications (NASDAQ: LVLT)  



My June 20th Trading Alert on LVLT at $7.37 completely bombed. The suggested stop loss of $6.37 was hit a couple of days ago, making this idea a loser.

The market loved it when a group of investors, including Warren Buffet's Berkshire Hathaway converted $1/4 billion in debt to equity. The market hated it when the company replaced that debt with a new round of $400 million in convertible debt.

I don't really get it. The $250 million in convertible debt had a 7% coupon and a $2.80 conversion price. The new debt has a 2.8% coupon and a $7.20 conversion price. Any way you slice the pie, this company is now able to obtain much better financing terms, which implies it is a much better company.

In this past March quarter analysts expected the company to lose $.67 per share. LVLT delivered $.22 per share in profits for a huge upside surprise.

The stock has a schizophrenic history. Last year on July 3, 2002, the stock was $2.75. On July 31, 2002, the stock hit $7.44. I believe there could be another upside surprise in the June quarter, which will be announced on July 24th.

Personally, I own the September 7.5 calls at $1. They are now trading about $.30. I will add to my position and perhaps buy a few shares of the common stock as I believe the precipitous drop you see on the screen is an emotional overreaction. This is the only "dot-com" with Warren Buffet for a shareholder. I'd rather bet on Buffet than the Bear Stearns analyst who has a "underperform" rating on the stock.

I put a one year window in time on this alert. If the company does well, the Bear Stearns analyst will be upgrading to a "buy" at $10, and a "strong buy" at $15.
  Irvine Sensors (NASDAQ: IRSN)  




Lack of reportable news is keeping this stock out of the limelight. However, there could be a lot going on behind the scenes. After the market closed on Wednesday the company announced it had completed another round of equity financing at very favorable terms. They raised approximately $1 million. An institutional investor purchased restricted shares at $1.40- representing a reasonable 15% discount to the prevailing market. They also received one warrant for each four shares purchased, which converts into common stock at $2.25, and can be called in if the stock trades over $3. Clearly a vote of confidence on the future stock price by this investor.

The military side of their business is well documented and growing. The private sector side of the growth prospects remains a bit mysterious. Look for some disclosure on this side of their business to put some life in the stock in the hopefully not too distant future. This stock remains an undiscovered gem as it stills sports a very low market cap despite rapid growth over the past two years. Something is bound to happen which will put this stock on the radar screen.
  QT5 (OTC BB: QTFV)  


Those who have been following this situation know the stock price was sabotaged by an obscure politician from Maine who didn't like their smoking replacement beverage.

Since that event the company has been dead quiet.

I have heard the legislative proposal in Maine has been dropped. Brooke's Pharmacies has restocked NicoWater. Distribution is picking up nationwide. However, this information comes from an unverified source. The company has made no public disclosure.

I have also heard the company is afraid to make any public disclosure on its distribution efforts. It seems each time they get high profile publicity, the anti-smoking lobby groups attack them.

I don't understand this attitude, as it seems like their product fits the needs of the anti smoking groups.

At any rate, the stock began behaving much better on Thursday. It rebounded to $.24 on 247,000 shares. Perhaps the rumors are accurate. Time will tell. My feet are firmly planted in the air on this one until we know more about what's going on.

Muscle cells, blood cells, and nerve cells, do not normally replicate themselves whereas stem cells may replicate many times. When cells replicate themselves many times over it is called proliferation. A starting population of stem cells that proliferates for many months in the laboratory can yield millions of cells. If the resulting cells continue to be unspecialized, like the parent stem cells, the cells are said to be capable of long-term self renewal.

One of the fundamental properties of a stem cell is that it does not have any tissue specific structures that allow it to perform specialized functions. A stem cell cannot work with its neighbors to pump blood through the body like a heart muscle cell.   It cannot carry molecules of oxygen through the bloodstream like a red blood cell and it cannot fire electrochemical signals to other cells that allow the body to move or speak like a nerve cell.  However, what unspecialized stem cells can do is give rise to specialized cells, including heart muscle cells, blood cells, or nerve cells.

It is the ability to "become specialized cells" that has caused so much excitement over the potential of stem cells.  Think of what modern medicine may become if we were able to repair any damaged cell in our body through the use of stem cells.

Embryonic Stem Cells

Scientists primarily work with two kinds of stem cells, which are embryonic stem cells and adult stem cells.  Embryonic stem cells, as their name suggests, are derived from embryos that develop from eggs that have been fertilized in an in vitro fertilization clinic and then donated for research purposes with informed consent of the donors. They are not derived from eggs fertilized in a woman's body. The embryos from which human embryonic stem cells are derived are typically four or five days old and are a hollow microscopic ball of cells called the blastocyst.  There is a lot of political controversy surrounding the use of embryonic stem cells.  This has been the cause for many companies moving some of their research and development overseas specifically to Europe.

Currently, under the Bush Administration policy, the National Institutes of Health (NIH) can only grant funding for research using already established stem cell lines.  Many scientists have complained that the lines are of poor quality.   Why can't they just use new stem cell lines?  To establish additional lines researchers need to use new embryos discarded by couples undergoing fertility treatment.  NIH grant money is like a Small Business Administration (SBA) loan that you don't have to pay back.  They have helped fund thousands of companies, universities, and researchers.  The reality is by not allowing NIH funded labs to use new lines effectively prevents the true exploration of embryonic stem cells.

Adult Stem Cells

An adult stem cell is an undifferentiated cell found among differentiated cells in a tissue or organ, can renew itself, and can differentiate to yield the major specialized cell types of the tissue or organ. The primary roles of adult stem cells in a living organism are to maintain and repair the tissue in which they are found.

The history of research on adult stem cells began about forty years ago. In the 1960s, researchers discovered that the bone marrow contains at least two kinds of stem cells. One population, called hematopoietic stem cells, forms all the types of blood cells in the body. A second population, called bone marrow stromal cells was discovered a few years later. Stromal cells are a mixed cell population that generates bone, cartilage, fat, and fibrous connective tissue.

Scientists in many laboratories are trying to find ways to grow adult stem cells in cell culture and manipulate them to generate specific cell types so they can be used to treat injury or disease. Some examples of potential treatments include replacing the dopamine producing cells in the brains of Parkinson's patients, developing insulin producing cells for type I diabetes and repairing damaged heart muscle following a heart attack with cardiac muscle cells.

Future Outlook

The specific factors and conditions that allow stem cells to remain unspecialized are of great interest to scientists. It has taken scientists many years of trial and error to learn to grow stem cells in the laboratory without them spontaneously differentiating into specific cell types. For example, it took twenty years to learn how to grow human embryonic stem cells in the laboratory following the development of conditions for growing mouse stem cells. Therefore, an important area of research is understanding the signals in a mature organism that cause a stem cell population to proliferate and remain unspecialized until the cells are needed for repair of a specific tissue. Such information is critical for scientists to be able to grow large numbers of unspecialized stem cells in the laboratory for further experimentation.

It is believed that in the future stem cells may become the basis for treating a plethora of diseases.  Whether it will be from embryonic or adult stem cells is something that has not been scientifically proven.  We are still too early in the game to know which source is going to be more effective.  The risks of just focusing on one type of stem cell and not the other are just too great.  There is just not enough data to assess whether embryonic or adult stem cells will work better and that is why research on both is essential.  It is truly disheartening for patients and their loved ones to sit idly when the potential for stem cell therapies is not being fully explored.

Celebrities such as Michael J. Fox and Christopher Reeve have championed stem cell research in hopes of finding a cure for Parkinson's disease as well as Spinal Cord Injury.  How far are we from actually developing cures?  No one knows the answer to that question but it is inevitable.  For those suffering today they can only hope it is sooner than later.

  Germany University Intranet Completes Testing On Amnis Technology  




Apparently, the German University system is nationally connected by several private broadband gigabit networks, which are operated by the Deutsches Forschungsnetz, the computer based communication infrastructure of science, research and education in Germany.

According to today's news release, extensive testing of the Amnis system has been performed at the Leibniz Computing Center at Munich University. The following quote comes from Dr. Victor Apostolescu, head of network planning for Leibniz: “Amnis systems rate the best of cost, performance and functionality for multicasting, content distribution and live streaming desktop player,” said Dr. Victor Apostolescu, Head of Network Planning and Management of LRZ.  “Their key advantages include the products small size and simplicity, low latency, remote camera control and web-browser management, which are all ideal for classroom environments.”

New management seems to be wasting no time in getting this company back on track. From today's press release, I believe it is fair to assume new product orders will follow for the German University system, which is already hard wired for significant broadband capability.

As you can see from the chart, the stock is stair stepping higher with each news release. Investors are getting more comfortable with the imminent turnaround in the fortunes of Amnis. The highs are trying to get higher, and the lows are definitely getting higher.

Today's news release came out just after the close. I wouldn't be surprised to see the stock break through the post June 6th high of $.125 and maybe challenge my $.15 target in the next day or two. Whatever the case, the support levels for the stock are definitely headed North.

However, I believe the biggest moves could be ahead. Look for progress in the homeland security arena to really put some serious legs in the stock. If that happens, you won't own enough.

q    SeaLife 100 XP, 15 years of research in the making, now introduced to the $8 billion market.

q    The SeaLife formula is “trade secret” protected like Coca Cola and KFC products, so that the formula cannot be reverse engineered through patent information.

q    SeaLife Corp. (OTCBB: SLIF), a BIOTECH company.

q    Management and insider ownership over 60%.

q    Research concluded there are over 86,000 sea going vessels with an annual usage of over 100 million gallons of paint.   Each vessel requires on average 1500 gallons per application.  

David Westover of Master Argonaut, marine management located in Marina Del Rey, CA stated, "This is absolutely the best anti-foul paint I have seen in my 25 years in the marine industry. SeaLife 1000 is easy to apply, goes on smoothly, and quickly dries to an even smoother surface. In overseeing a vessel painted with SeaLife 1000, I was amazed to watch the hull remain completely foul free -- despite sitting still in a stagnant part of the marina for over 8 months. There was no evidence of tubeworms or barnacles or any other type of fouling. I would highly recommend SeaLife 1000 to anybody who wants an effective, long lasting anti-foul paint."

CRUNCHING THE NUMBERS

IF SEALIFE COULD GAIN JUST A 2% MARKET SHARE, IT WOULD RESULT IN SALES OF 2 MILLION GALLONS OF PAINT PER YEAR. THIS WOULD GENERATE OVER $450 MILLION.

WITH LESS THAN 8 MILLION SHARES OUTSTANDING, THE COMPANY WOULD GENERATE $56.00 PER SHARE IN REVENUE WITH AN EBITDA OVER $17.00 PER SHARE!! THAT’S ON ONLY 2% MARKET SHARE!!

LESS THAN ONE HALF OF ONE PERCENT MARKET SHARE WOULD STILL GENERATE $4.00 PER SHARE EARNINGS.

COMMERCIAL & NAVAL COATINGS USAGE ESTIMATE


MERCHANT MARINE VESSELS              71,453                                       392,392,578

NAVAL & COAST GUARD VESSELS             12,832                                        22,338,750



TOTAL VESSELS / GRT (1) (2)          86,613                                      414,731,328



Basis for Estimates



1.  MERCHANT MARINE VESSELS               # of Vessels                       Approx GRT

                         Cargo vessels                                                    71,207                                       387,917,398

                         Passenger vessels                                            248                                               4,475,180

                                      Subtotals                                 71,453                                       392,392,578



2.  NAVAL & COAST GUARD VESSELS       # of Vessels                       Approx GRT

                         Submarines                 750 tons          945                                             708,750

                         Destroyers               4000 tons                  382                                          1,528,000

                         Corvettes & Frigates 2000 tons                  865                                          1,730,000

                         Aircraft carriers      70000 tons                    35                                          2,450,000

                         Battleships            60000 tons                     4                                             240,000

                         Cruisers                  30000 tons                   95                                          2,850,000

                         All other (3)                       1000 tons           12,832                            12,832.000

                                      Subtotals                                 l5,l58                                       22,338,750



(1) Gross Registered Tonnage

(2) Survey figures exclude nations with nominal tonnage.

(3) Patrol craft, torpedo boats, tankers, tenders, mine sweepers, auxiliaries.



For more information on SeaLife, go to www.SeaLifeMarine.com

Imaging Technologies used to sell digital imaging solutions. It was one of the high flyers in the last bull market. The company's fortunes took a turn for the worse when they shipped a $4 million order to a Japanese company that filed for bankruptcy shortly after taking receipt of the merchandise. IMTO took the loss on the order and subsequently defaulted on some bank loans.  

High flying IMTO immediately began spiraling towards the ground. Chairman Brian Bonar got control of the stick just prior to impact by creating an entirely new business. The plane is now climbing out slowly. Inside of one year this company could regain high altitude and just flip on the autopilot and cruise. According to Mr. Bonar, this turn around is being fueled by positive cash flow from the new business. I'm writing about it now because I'd rather give you the facts and let you make up your own mind while the stock is still trading under 2 cents.
  IMTO is Now A PEO  


Do you know what a PEO is? The market for PEO's was $5 billion in 1992. By 2000 it had grown to $26 billion.  

If you are a PEO you provide an outsourced service for small companies. PEO stands for Profession Employee Organization. Rather than have the extreme cost of a human resources department and all the effort and expenses associated with payroll, workmen's comp, insurance benefits, and pension plans, you can simply pay your labor expenses in one payment to a PEO. They take if from there.

35 million Americans work for companies with less than 100 employees. That is the size of the potential market.

Once you retain a PEO to replace your Human Resources Department, your employees formally become employees of the PEO. They just show up for work at your place of business.

Through the power of numbers the PEO has the ability to negotiate better pricing on many employee related costs like health insurance, pension plans and 401K's, workmen's comp, etc.

The business model is beautiful, which attracted me to the idea. PEO's have very high and consistent cash flow, which allows for simplistic evaluation.  

IMTO made a few mistakes in the early going, but the business has stabilized, and according to Chairman Brian Bonar performs as follows:

IMTO generates nearly all its revenues from the PEO business.
Currently, there are about 4,500 employees managed by IMTO.
Each employee creates cash flow of about $70 per day- this equates to $315,000 in daily revenue flow.
IMTO makes about 8% gross margins on daily revenue- hence $25,000 in gross profits per day.
At 20 working days per month- this equates to $500,000 in gross profits per month.
Hard costs to run the company are about $350,000 per month.
Therefore, the company is now generating $150,000 in positive cash flow per month, or $1.8 million annually. Not bad for a stock trading at $.015.
The Negative  

In a phrase- $12 million in debt- nearly all of it in default. Much of it with judgments against the company. They should have gone bankrupt several years ago.

However, the senior lender holds a $3 million note. No one can collect until the senior lender gets paid, and IMTO has negotiated an indefinite, interest free extension.

Most of the debt is nearing the statute of limitations. If not collected it becomes uncollectable, and the company skates. Chairman Bonar believes he can eradicate the entire amount of debt over the course of the next year through low ball settlement offers and expiring statutes. He now has the platform to achieve this goal.
  Today's News  




Today, just after the market closed, IMTO announced the acquisition of all the managed employees of Joint Employers Group. The acquisition adds 1700 more employees under management, bringing the total to about 6,200.  

This means the company will now have about $435,000 in daily cash flow, $35,800 in gross profits, and about $200,000 in monthly free cash flow. This equates to $2.4 million in annual positive cash flow.

From here forward the company will only be reporting the gross profit as revenue, not the amount of money it collects from the company for its employees. This will bring revenues down considerably, but bring gross margins up substantially. You end up with a low revenue/high profit margin company as opposed to high revenues/low profits. In either case, the positive cash flow remains the same.

A look at trailing financials does not reveal this performance. A good deal of new business was added near the end of March, and some unprofitable businesses were ejected.  

All of the figures were provided to me by Brian Bonar, Chairman of the company. I have actually trimmed his estimates considerably. You wouldn't believe the actual numbers if I told you.

The June quarterly performance will not be reported for some time as it is the company's fiscal year end, but they will show a dramatic turnaround.  

There is an advantage to writing a newsletter as opposed to being an analyst. I don't have to wait for the audited numbers. I can give you this information while the stock is still under $.02. There are 180 million shares issued and outstanding at this time. Therefore, the entire market value of the company is only $3.8 million. >From these levels, I think there could be a triple in the stock.

So, for you risk minded readers who want a lot of bang for the buck, here are my thoughts:

Buy up to $.03 (yes, that's 3 cents)
Stop Loss: $.015
Price Target: Short Term (60 days)- $.05. This is just a stab at a number- there is no telling where this one could go.
I included a chart. It only tells us there is support for the stock at about $.01 and overhead resistance at $.025. Not much you can do with a chart on this one.
The company has been extremely quiet about its progress. We are the first source to feature the turnaround situation. This gives you a competitive advantage over other potential market participants.

Family Room was a problem child in the early going, but in recent months has rebounded nicely off an oversold condition. Lack of news has kept buyers on the sidelines. The company made an announcement just after the close on Friday. This should put some life back in the stock, and it will probably eclipse the $.18 high made back in April in the near future.

For those who need a refresher, Family Room, through wholly owned subsidiary Emmet/Furla productions, is an independent film producer. The company has successfully produced about 15 movies. Last November they moved to a higher level with their first two theatrical releases- Half Past Dead starring Steven Segal and Narc starring Ray Liotta.

The stock was trading in the $.40 range on the expectations that Liotta would get an Oscar nod for his performance in Narc, which would put some serious life in the film and serious money in Family Room's bank account. It didn't happen, and investors knocked the stock down to $.07 before it began to rebound.

I believe Family Room is an ideal penny stock to own. Family Room is like a biotech stock without the biotech overhead. One hot product could put millions in the bank account. However, since they use other people's money to develop products, they don't have the huge expenses associated with biotech research. In fact, they run the entire company for about $750,000 a year. One hit movie and Family Room could earn $1 per share.

They are better positioned for a big hit than they have ever been in their six year history. They are currently developing the popular 1980's Micronauts brand along with Hollywood heavyweight Gale Anne Hurd (produced Terminator 1 and 3, the Hulk, and Armageddon). They are also developing the Abominable Snowman story for a movie along with producer Ilya Sulkind (Superman 1,2, and 3).

One hit and this stock will rocket up the charts.
  Family Room- Stock Is Poised to Try For Higher Levels  




Friday, just after the market closed, Family Room announced it would begin filming on a new project on August 10th. The company is unable to disclose anything about the movie until the casting is complete and all the proper disclosure to the Hollywood Press has transpired.

In addition, Family Room revealed there were two more major film projects it would be announcing in the near future. This company has a lot of product in the pipeline, giving us numerous opportunities for a major home run in the next two years. Below, you will find a list of all their properties in various stages of development.

As you can see from the chart, this stock has made nearly a perfect 50% retracement from the February levels of $.21. It dropped to $.07, rebounded to about $.19, and has been camping quietly in the $.12 to $.14 range for a couple of months.  

Management informs us Friday's announcement is the first in a series of announcements expected in the near future which will demonstrate significant progress towards the big home run.

I believe Family Room could easily roll up to the $.25 level. There are only about 20 million shares issued and outstanding. $.25 would only represent a $5 million market value, which is easily achievable. Long term I'm looking for $1. One hit movie and we will be there.

It is very difficult to find a compatible bone marrow donor with only 1 out of 3 patients ever finding a match.  HSCs from peripheral blood (patient's own blood) present a risk because of the possibility of injecting cancer cells into a patient who no longer has the disease.  This is why cord blood represents a potentially break through advance because it is a non cancerous source.  Additionally, as more cord blood is banked the pool of donors grows which increases the chances of finding a compatible donor.  The downside to HSCs obtained from cord blood is that the quantity obtainable is only sufficient enough to treat a person/child weighing approximately 100 pounds.  There are currently no cord blood expansion technologies available that can increase the number of HSCs without causing differentiation of the cells.  Once the cells differentiate they cannot be transplanted into the patient.  Could there be an answer to this problem?  Next week you will meet the company that may possess the solution.
 






Cord Blood - The Promising Source of HSC

One of the major efforts in developing HSC technologies has been to identify new and better sources for stem cells.  The majority of transplantable HSC in adults currently comes primarily from donor peripheral blood or bone marrow. It is now known that HSCs drift into the peripheral blood and can be induced to transfer rapidly into the blood system. This has led to the extensive harvest of peripheral stem cells for this purpose but finding a compatible donor proves to be very challenging and using one's own blood holds the risk of reintroducing cancerous cells back into the body.  Now another source of HSCs is becoming very prominent.

This source of transplantable and lasting HSCs is from umbilical Cord Blood (CB). Blood is drawn from the umbilical cord after birth, but before the discharge of the placenta.  The standard procedure at birth is that CB is discarded with the placenta making this option free of ethical controversy.  Its collection is simple and non-invasive to the mother and the baby.

There are other benefits to using cord blood that are listed below:

Use of CB is already FDA approved and does not require further clinical testing.
The HSCs drawn from CB can differentiate into primary hematopoietic precursors and create hematopoietic clones in cultures better than those cells taken from adult bone marrow.
CB has lower levels of contamination with common viral pathogens, such as Cytomegalovirus , and is more tolerant of alloantigens.
Due to the increased use of CB cells, it is expected that the number of CB banks will grow significantly.
CB cells have high tolerance levels, giving way to lower GvHD.
It is important to note that scientists have found no difference in the functionality of HSCs drawn from bone marrow, peripheral blood or CB.  However, the small amount of blood collected from umbilical cords is usually around 100 milliliters. The use of CB has been limited stem cell transplants in babies and children weighing less then 100 pounds.  There are no existing CB cell expansion technologies that can increase the number of HSCs without causing differentiation of the cells.  Once the cells have differentiated they cannot be transplanted into the patient.
Transplants

Hematopoietic stem cells are primarily used in transplant medicine to regenerate a patient's blood and immune system after they have been treated with chemotherapy and/or radiation to destroy cancer cells.  At the same time the chemotherapy and radiation destroys the cancer cells in a patient, they also destroy stem cells. Therefore, an infusion, or transplantation of stem cells is performed after the chemotherapy and/or radiation treatment, and these stem cells migrate to the patient's bone marrow where they will reproduce, creating a new blood and immune system for the patient.

For the sake of definition, there are several types of bone marrow transplants and they are categorized according to the source of the stem cells.

Autologus:  stem cells come from the patient.
Allogeneic:  stem cells come from a donor.
Syngeneic stem cells come from an identical twin.
The transplant procedure involves three phases.  In the first phase, lasting 5 to 14 days, the recipient is prepared for the graft (tissue).  In the second phase, HSCs are procured from a compatible donor and intravenously administered to the recipient.  The third phase is a period of waiting for the HSCs to engraft and function normally in the recipient.
Innovation in Practice

In February a boy named Dimitri Bonnville underwent a stem cell transplant to help him regain lost heart tissue after he was shot in the heart by a nail gun.  He then suffered a massive heart attack and underwent an experimental procedure using stem cells harvested from his own blood.   The stem cells were later infused into the damaged portion of his heart via a catheter.  The transplanted cells regenerated Bonnville's damaged heart and stimulated new blood vessel growth rapidly.  Bonnville's heart ejection fraction, a measurement of how much blood is pumped out the heart's main pumping chamber, is at 40%, compared to 25% following his injury. Normal ejection fraction is approximately 50% to 75%.

The future use of hematopoietic stem cells for therapies looks unbelievably promising.  The case of Dimitri is just one of many examples out there but stem cells are the future of medicine.

We have illustrated the shortcomings of harvesting hematopoietic stem cells from bone marrow, peripheral blood, and also cord blood.  Out of the three sources cord blood is the most viable because the cells are non cancerous and we are on the brink of creating an extensive database of cord blood donors.

The small amounts of HSCs obtained through cord blood are not sufficient enough for use in full grown adults.  This has been one of the challenges that cord blood banks face.  Without expansion technologies it has been argued that storing cord blood maybe useless although the hematopoietic stem cells derived from this source shows tremendous promise.  There is an opportunity here, a rather large one, that if solved could prove to help humanity and reap favor on shareholders.   Next week the SmallCap MarketWatch will be introducing a company to our readers that could help put order in what is now a very chaotic environment in the world of cord blood and HSCs.

Today, we are issuing a trading alert on Pluristem Life Systems (PLRS) because the company is close to developing a system that can expand hematopoietic stem cells.  Shares of Pluristem closed today at $1.60 per share which is a significant discount to what the company recently raised financing at.  On June 5 the company announced that they had closed a private placement at $1.80 per share.  This means that investors have an opportunity to own shares of Pluristem cheaper than what the institutions paid.  We are placing a target of $2.25 per share on the stock representing a potential gain of 40% from today's closing price.

Pluristem was founded after five years of cooperative research and development by Dr. Shai Meretzki, the Technion Israel Institute of Technology and the Weizmann Institute of Science.  These are two of the world's most respected research institutions.  The company has just recently become a publicly traded entity.  They know own the exclusive rights to this stem cell expansion technology and is working to bring this breakthrough into the market.  The expansion of HSCs from cord blood will enable the use of the stem cells for transplanting in adults where insufficient stem cells are available.

Pluristem's Breakthrough Technology

Pluristem has developed a bioreactor, called PluriX, which will bring about the expansion of CB to proportions that will be enough for several adult transplants. The company hopes to provide cell expansion services to transplant centers and CB banks in the US and Europe.

PluriXâ„¢ is designed to perform controlled multi-expansion of HSCs for bone marrow transplants. The general idea is to cause, by way of the bioreactor, self-renewal of early stage stem cells and prevent them from differentiating. The system creates an artificial physiological environment in which the cells grow and reproduce.  In other words the bioreactor tricks the hematopoietic stem cells into thinking that they are inside bone marrow.  This is what causes the stem cells to expand and proliferate.

Pluristem's technology means that one portion of CB can be expanded to quantities enough for several adult transplants.  Healthy autologus CB can be taken at time of birth, expanded into mature stem cells and stored by a cell bank in the instance that it may be needed by that specific patient at a later date.  This will eliminate the current practice of transplanting cancerous cells back into the patient.  These cells may also be used for transplants in other patients.

Increasing the number of sources for HSCs will reduce the cost for donor searches and also increase then chances of finding a suitable match.  It also doesn't hurt that the higher the number of HSCs the increased potential for faster more successful engraftment of the stem cells.

Market Size

There are presently more than 50,000 bone marrow transplants (BMTs) performed worldwide. However, only one in three patients actually find a compatible donor thus the number of potential BMTs is estimated to exceed 150,000. There are 250 transplant clinics in the US, and these are now being augmented by a growing number of cord blood banks located around the world.  It is expected that, in the near future, CB will be drawn at the time of every birth and stored for later use. This will provide a full base of donor opportunities to patients throughout the world.

There are currently over ten large cord blood banks in the world, most of them located in the US.  In 2001, they cryopreserved (froze) and stored cord blood from some 34,000 to 36,000 donors, and they project annual growth of over 15%.  Pluristem's cell expansion services have the potential to become a standard procedure when it comes to banking cord blood.

The SmallCap MarketWatch is issuing a trading alert on Pluristem Life System because it is on the brink of accomplishing something that has not been done to this day.  The capability to expand hematopoietic stem cells (HSCs) without having the cells differentiate could ultimately save thousands of lives and bring a wind fall to its investors.

Whatever happened to Virtual Reality? Five years ago it was everywhere. A favorite of Hollywood, we all believed suits, goggles, visors, and helmets could put us on the virtual ski slope, beach, or in a romantic encounter with our personal virtual fantasy.

Virtual Reality is all about using the interactive capabilities of computer driven environments to replicate an experience. Despite falling off the media's radar screen, virtual reality is alive and well. One Texas based company has had some commercial success with Virtual Reality products, and is now changing course towards a much more vibrant market than in past efforts.
  Virtra Systems- It's Out There Now  




Have you seen this truck at a NASCAR race or at the grand opening of a WalMart store? This is the Pennzoil "Vrooom" truck. Used primarily for promotional purposes by Pennzoil, patrons go in one door, have a virtual reality experience, and exit out the back.

The virtual reality experience takes you on a tour of the inside of a car engine. Hosted by Jay Leno, you enter the interior of the engine and look around. You actually squirt oil on various engine parts. Near the end, the whole experience transforms to you driving an Indy car around the track at the Indy 500.
 



The experience is complete with motion, sight, sound, and even smell. The odor of oil, exploding gases, and burning rubber actually invade your sinuses.



People enjoy a similar kind of virtual experience courtesy of the Red Baron Pizza chain. Red Baron fields a team of biplanes which performs at air shows throughout the country. A promotional virtual reality experience truck also follows the tour. Patrons experience flying the aerobatics aircraft.

Here are three kids enjoying the experience.
  Virtra Systems (OTC BB: VTSI) - What's Coming  


In addition to the Virtual Reality promotional products Virtra Systems sells, they have also been successful in the amusement market. They had installations at many of the major amusement parks like Six Flags, but have now exited that business. They provided the virtual reality experience at their own expense and maintained them with their own staff in return for a percentage of the gate. They found this business was unprofitable, and sold the rights to manage that division.

They continue to pursue potential new customers in the promotional market, but a new product line for a specific market is far more exciting.



Virtra Systems is aggressively entering the "Judgmental Use Of Force" market. Pictured here is the new IVR-360, introduced on the internet for the first time today, which is a virtual training environment for law enforcement or military who might find themselves in a potential "Use of Force" situation.

The virtual amusement market is estimated to be about $6 billion annually, but the Use of Force Training Simulator market is estimated to be about $36 billion. This market is growing rapidly, spurred by growing fears of terrorism and world wide conflict in our Post 911 world. The current budget has about $37.7 billion earmarked for homeland security and $400 billion set aside for defense.

The ''fixed" version provides a full, live, 360 degree training environment. No head sets are required, and the trainee uses the actual weapon which would be used in the field. This is not a screen at which you point a plastic gun. It is also the only full 360 degree training system available on the market today that truly simulates a high stress situation.



The hardware in the fixed system sells for about $750,000 without the custom designed scenarios that are created according to the client's instruction. Pictured here is the control panel where the trainer monitors the performance of the trainee and serves up the various training scenarios.

Virtra Systems has also developed a portable version of the Judgmental Use Of Force training system. Here is a mock up of the portable version, which sells for a mere $105,000. However, once purchased, Virtra still has to create training scenarios based on the customer's needs, which can lead to substantial add on sales after the initial purchase is made.
 




  Conclusion  



One year ago Virtra Systems was trading at $.40. Today it is about $.10. One year ago the company was focusing its efforts on the $6 billion gaming market. Today it is focusing its efforts on the $36 billion Judgmental Use of Force training market.

There are only 40 million shares issued and outstanding, meaning the company's total market value today is about $4 million. Based on March quarterly sales figures, the company is currently enjoying about $1 million in annual sales at this time.

This is another penny stock I believe could easily be trading at $.25 with a few positive developments and a more cooperative market environment. The stock is probably entitled to rebound to $.15 along with the penny stock market, but higher levels are in the cards with high profile sales of the new training simulators.

Virtra Systems is working diligently towards penetrating the training simulator market with Governmental Agencies and the military. If sales start to come in, this stock will grow wings and take off.  
 

Here are my thoughts on VTSI:

Buy up to $.14- I believe the stock is entitled to rebound to January/February levels.
Price Target- $.25 with a 90 day window in time. Let's give this company some time to deliver sales of the training simulators. One sale to the right high profile customer could send this stock rocketing up the charts.
Stop Loss- $.05- worth the risk of half your risk capital versus the upside potential.
Today, just after the market closed, Virtra Systems unveiled its new website devoted to the Judgmental Use of Force Training Simulators. You can visit the site at www.virtratraining.com.  
These products represent the future of the company, and considerable profit potential. If the government agencies start buying these trainers, you will wish you owned more.

Cyber Digital, Inc. Expects Venture Capital and Strategic Financing to Enter the $84 Billion Critical 'Last Mile' Voice and Broadband Access Market

Venture and strategic investors to directly invest in Cyber Digital as well as in the open market

HAUPPAUGE, July 16, 2003 - Cyber Digital, Inc. (OTC BB: CYBD), announced that it expects venture capital and strategic financing, in multiple rounds, to finance its growth as it enters the $84 billion critical 'Last Mile' voice and broadband access market. This market was just recently deregulated or opened up by the Federal Communications Commission (FCC). Venture and strategic investors are expected to directly invest in Cyber Digital as well as in the open market.

This strategic capital raise may permit Cyber Digital to participate in the metamorphosis of critical "Last Mile' local switching access market for both voice and broadband data as it begins. Cyber Digital's solutions eliminate reliance on Bells for critical 'Last Mile' connections to business customers of competitive service providers (CSP) such as long distance carriers (LDC), competitive local exchange carriers (CLEC), and Internet service providers (ISP).

FCC Chairman, Mr. Michael Powell stated, "The switch (such as Cyber's switch) is the brains of ones's network and to be without one is to be a competitor (LDC, CLEC or ISP) on life support fed by a hostile host (Bells)."

About Cyber Digital, Inc.

Cyber Digital, Inc., is a leading manufacturer and software developer of advanced digital voice switches and Internet Protocol (IP) systems for network operators worldwide. Website is www.cyberdigitalinc.com

This press release contains forward-looking statements, pursuant to the "safe harbor" provisions as fully described in Cyber's SEC filings

As I write this edition, the stock has already traded over 4 million shares and broken through $.09. I still believe over the longer term the stock could find its way back to the $.25 level if product sales accelerate.

Conclusion- if you missed the first 100% move in this stock from $.07 to $.15, you might have another shot. Click Here to read the full text of the press release.
  VirTra Systems (OTC BB: VTSI) Rolls Out Fixed 360° Version of Training Simulator  




Just prior to the close today, VirTra Systems, my latest idea in the microcap arena, announced that their new "Judgemental Use Of Force" 360° simulator has now been introduced and is ready for sale.  

This event represents the entry into a new and burgeoning market for VirTra Systems. The company already has a foothold in the promotional market through contracts with Pennzoil, Red Baron, Buick, and Pepsi. Homeland Security and military applications represent a new market for VirTra Systems, which has me very excited about the prospects for this company.

No other simulator on the market today matches VirTra Systems for creating a full, 360° high stress training experience. This product uses multi array projection instead of a head set. The trainee uses the actual weapon he or she would use in a real life situation, not a plastic video game type appliance.  

The Homeland Security budget has expanded to $37.7 billion. Earlier today, lower Manhattan was shut down as a City Councilman was reported to have been shot at City Hall. These types of events tend to fuel demand for trained security officers, and Virtra Systems has products to fill the demand. Typically, governmental budgets are planned in the summer and fall, and contracts are awarded in the September to December time frame for the coming fiscal year.



I believe there is plenty of upside from the ridiculously low level at which this stock trades. Based on today's levels, the market is only valuing the company at about $4 million. This stock has also pulled back into the middle of its trading range, offering an ideal, lower risk entry level.

If this company begins announcing sales of the simulators to any kind of security agency, be it military or non-military, I suspect the stock will grow legs and run up the charts. The trick is to own it before it happens.  

The surge you see in July was on heavy volume. The ensuing pullback has been on light volume, suggesting it could turn back up quite easily. I don't believe this stock will hang around in the $.10 area for long, especially if contracts start rolling in.
 
 

Celgene will be able to provide stem cell transplant units sourced by Anthrogenesis as a therapeutic offering to oncologists treating hematological cancers.  The company will also become a leader in the business of private stem cell banking -- collecting, processing and storing stem cells retrieved at the time of birth from the placenta and umbilical cord blood, for family use.  Anthrogenesis is a licensed blood bank and a FDA-registered cell therapy company.

Geron Corporation (GERN) is a biopharmaceutical company focused on developing and commercializing therapeutic and diagnostic products for applications in oncology and regenerative medicine, as well as research tools for drug discovery. The company's product development programs are based on three patented core technologies:

Telomerase is an enzyme that, when introduced into normal cells, is capable of restoring telomere length (the end of a chromosome), consequently increasing the life span of cells without altering their normal function or causing them to become cancerous.
Human embryonic stem cells enable the development of transplantation therapies by providing standard starting material for the manufacture of cells and tissues.
Nuclear transfer is used for the creation of cloned animals.  Geron owns the technology that created Dolly the cloned sheep back in 1997.
This is the most controversial stem cell research company in the U.S. because of its support for embryonic stem cell research.  Recently Geron received a lot of attention when the company's stem cell therapy for spinal cord injury was highlighted in several sources including newscientist.com and independent.co.uk.  The articles focused on the results of oligodendreocytes, derived from human embryonic stems cells, which were transplanted into paralyzed rats.  After 38 days, control mice remained paralyzed, where as treated mice were able to walk.

Pluristem Life Systems (PLRS) was founded after five years of cooperative research and development between Dr. Shai Meretzki, the Technion Israel Institute of Technology and the Weizmann Institute of Science.  The company has developed a bioreactor, called PluriX, which will bring about the expansion of cord blood to proportions that will be enough for several adult transplants. The company hopes to provide cell expansion services to transplant centers and cord blood banks in the US and Europe.

The SmallCap MarketWatch issued a trading alert on Pluristem last week.  Shares of the company closed at $1.85 per share up from $1.60 for a gain of 15.625%.  Shares have since drifted down to close at $1.68 per share yesterday.  Long term investors have a chance to own shares at a discount to the $1.80 per share private placement that was completed in June.
 

StemCells, Inc. (STEM) is engaged in research aimed at the development of therapies that would use stem and progenitor cells to treat, and possibly cure, human diseases and injuries such as Parkinson's disease, hepatitis, diabetes, spinal cord injuries, stroke and some metabolic genetic disorders.  Progenitor cells are cells that have already developed from the stem cells, but can still produce one or more types of mature cells within an organ.

Dr. Irv Weissman, founder and director of the company is a professor of Cancer Biology, Pathology and Developmental Biology at Stanford University. His Stanford lab was the first to isolate in pure form any stem cell from any tissue in any species. This is why some consider him to be the father of stem cells.

StemCells, Inc is focused on three specific areas of research:

Neural cell program is investigating therapies to treat a variety of disorders such as Parkinson's disease, Huntington's disease, Alzheimer's disease, Epilepsy, ALS, Spinal Cord Injury and Multiple Sclerosis. The company has isolated human neural stem cells from brain tissue and has shown that these stem cells survive after implantation into animals, differentiating into cell types characteristic of the sites within the brain into which they are transplanted, including neurons.
Liver stem cell program seeks to repopulate and repair liver that has been damaged or destroyed as a result of disease or injury. The program is focused on the identification of stem cells that can restore liver function.
Pancreatic cell program is directed at isolating and characterizing pancreatic islet stem cells, which may be useful for treating Type I or juvenile-onset diabetes. Scientists at StemCells, Inc. are currently transplanting cells that express markers thought to be on pancreatic stem cells into diabetic mice to see whether this will alleviate their symptoms.

ThermoGenesis (KOOL) designs and manufactures medical devices and sterile single use disposables.

The company is best known for its BioArchive System which features a proprietary robotic, cryogenic device that automatically freezes, archives and manages an inventory of up to 3,626 individual 25 ml samples of cord blood. The system controls and records the freezing profile of each unit in nitrogen vapor, after which the unit is robotically transferred to a specified indexed location in liquid nitrogen. The BioArchive System tracks the storage address of each unit and assures that only the specified unit is retrieved when selected by the operator without exposing the other archived samples to detrimental transient warming events.

The National Institute of Health (NIH), through the National Heart, Lung & Blood Institute (NHLBI), sponsored a $30 million program to advance cord blood stem cell banking in the U.S. and has chosen to exclusively utilize the three BioArchive disposable bag sets. Two of the three NHLBI Cord Blood Banks, Duke University and Georgetown University, have already acquired the BioArchive.  The company has sold 48 BioArchive systems in 21 countries giving the company a strong customer base.

On June 12, 2003 ThermoGenesis scientific advisory board members presented clinical data on the use of cryopreserved cord blood stem cells in the treatment of lethal diseases at Senate Hearing. The Washington lobbying efforts may prove to be a tremendous break through for the company if legislation for the National Cord Blood Bank is approved.

By early next year 100 Boeing jet aircraft are expected to morph into flying cyber cafés. For a $25 fee, passengers will be able to enjoy high speed wireless internet access during their flight. Boeing intends to retrofit 4,000 jets by the end of the decade.

"Hot Spots" are popping up at locations nationwide. T-Mobile has already installed "Hot-Spots" at thousands of Starbucks locations nationwide. Verizon is charging into the fray by converting payphones in busy metro areas into "Hot-Spots".

Pronto is probably the biggest name in the Wi-Fi game today. Boingo, which provides Hot-Spots in Hilton Hotels and several of the larger airports around the country is not far behind.

However, Wi-Fi is not limited to busy metro areas. Because of the low infrastructure costs, Wi-Fi is ideal for rural environments. Small Wi-Fi ISPs, known as WISPS (Wireless Internet Service Providers) are popping up all over the mid west.

It is estimated that 80% of people in rural areas are now using the internet. Only about 22% have access to broadband, as neither cable or dsl has come to their homes. Rural wireless operator Midwest Wireless, a Minnesota based regional cellular carrier, has been installing Alvarion fixed wireless equipment for the past 18 months. The system now has 60 sites and about 1,500 broadband subscribers.
  Big Boys Jump Into the Fray  




Big boys with big bucks have been gearing up for the Wi-Fi revolution for several years. Examples include:

Intel is spending $300 million to market its Centrino computer chips, which come equipped for Wi-Fi.
Cisco Systems agreed to spend $500 million for Linksys, a Wi-Fi equipment maker. That will put Cisco into head-to-head competition with
Microsoft Corp. Microsoft is pushing XP, the new version of Windows with Wi-Fi features built in.
Cometa Networks, the new joint venture made up of Intel, IBM, and AT&T, is building a nationwide network of 20,000 hot spots over the next three years.
Verizon is building hot spots all over the country, converting phone booths into hot spots.
T-Mobile USA, already anchored in Starbucks, is following suit.
Is it any wonder the titans of technology are jumping into the Wi-Fi revolution? The bar graph I have provided shows estimates for the growth of wireless demand through 2004. Wireless users are expected to grow worldwide from 80 million in 2003 to 150 million in 2004. The North American market is the laggard, and just beginning to gather steam. Wireless use is far ahead of us in Europe.
  The Good News  

For the latest on the Wi-Fi revolution, the best resource on the Internet is www.80211-planet.com/.

I have identified a totally undiscovered Wi-Fi idea which no one knows about, and I mean no one. I'm not sure about the timing of the first release, but I hope to kick off the idea in next weekend's edition. This is a true ground floor opportunity in the hottest segment of the market. Right now, I have to run out to my local Fry's and check out the latest Sony Notebook computers equipped with the Centrino chip. I want Wi-Fi too. In the meantime, we you aware that:
  Family Room (OTC BB: FMLY) Producing Film Starring John Travolta  


Family Room snuck out a news release under everyone's nose Friday morning. It seems they are now filming "Love Song for Bobby Long", starring John Travolta and Scarlett Johansson. I spoke with management about the John Travolta movie. Family Room has chosen not to make a big deal out of the film, as they don't have a piece of the producer profits, and the film therefore has no chance to impact the bottom line.

They will collect some small producer fees and get the prestige associated with being executive producers on the film.

In the same press release it was also announced that Family Room has identified Hollywood artist Crash McCreery to create "The Abominable Snowman." This movie will be coproduced along with  Ilya Salkind ("Superman" I, II and III) and Vallhalla Motion Picture's Gale Anne Hurd ("The Hulk").

This project has the potential to be a huge money maker for shareholders of Family Room. Look for news of a big budget with a big studio and a percentage of the gross to send this stock charging up the charts. I still believe Family Room has a shot at $.25 in the short term (60 days).

The baskets are useful because readers that take the time to dig deeper into some of the companies will find real gems and may consider taking heavier positions on individual companies.  Those that may have less time to do research and choose the easier path of owning the entire basket have also fared very well.  The more time you spend on due diligence is directly correlated to how well you do in the markets (this is as long as you know what you are doing).  We decided to take a look at how these baskets have performed and the numbers were in our favor.  Seven out of twenty six companies were losers with an average loss of 4.26%.  However, the remaining nineteen companies saw an average gain of 61.54%.  Now do we have your attention?

Despite mentioning multiple companies in some of our early editions we didn't make official baskets until our April 17 edition.  The interesting title, Telecom: The Four Letter Word, focused on six telecom equipment penny stocks that were trading below their cash levels.  The bad news is that most of these companies are no longer great values.  However, the good news is that readers who shared our optimism on this sector back in April have reaped significant gains.  The total return for the basket is 69.30% based on Friday's closing prices.  This is a quite a performance in just three and a half months.


Based On Closing Prices Of 7/25/03

In our May 9th edition, Renaissance Of The Bubble Companies, we presented eight companies that really stood out among the hundreds that we follow.  These were former high fliers that boasted huge market capitalizations and were the darlings of Wall Street.  As the bubble deflated these companies' stock prices along with investor interest headed towards oblivion.  Somewhere along the way the companies began to turn themselves around and improved their fundamentals.  The brave readers that took the plunge into the "Bubble Companies" saw gain of 75.44% in less than three months.


Based On Closing Prices Of 7/25/03

What drove us to write The Big View On Nanotechnology was due to the overwhelming response we received when we asked readers what the next hot sector would be.   Hundreds of emails came into our in boxes with links to articles and companies that were doing big things with "small" technology.  The challenge was top find stocks that still had appreciation potential because most had already run up.  The nanotech basket was introduced on June 17 and in that time the total return has been a respectable 16.05%.  This is the perfect example of how diversification can be both a positive and a negative.  Owning the entire basket proved to be rewarding but having a large position in only Flamel Tech (FLML) would have produced an 85.56% return.


Based On Closing Prices Of 7/25/03

Our most recent sector focus has been stem cell research.  We dedicated an extraordinary amount of time on this topic because of the inevitable bills that would introduce a National Cord Blood Stem Cell Bank.  The SmallCap MarketWatch released our edition on the Stem Cell Research Basket July 23rd and as luck would have it two days later the bill was announced.   The momentum should continue this week when the Senate is expected to introduce a similar bill and also because Christopher Reeve will be visiting Israel to further his campaign for stem cell research.  These developments should draw attention to the companies in our stem cell research basket.


Based On Closing Prices Of 7/25/03





Conclusion

We presented twenty six companies in the four baskets and only seven (27%) saw losses while nineteen (73%) had gains.  Nine out of the nineteen gained over 50%, fourteen gained over 20%, and all of them gained over 5%.  Out of the seven losing stocks only one had lost more than 10% while the average percentage loss was 4.26%.  Meanwhile the average gain for stock's that went up was an outstanding 61.54%. What does all this mean?  If you haven't figured it out yet then chances are the SmallCap MarketWatch is not for you.

Today, we are issuing a trading alert on Refocus Group, Inc. (RFCG) a medical device company specialized in researching and developing surgical treatments for presbyopia as well as other eye disorders.  Shares of Refocus closed today at $1.50 per share. This is a 25% discount to the $5.75 million private placement that institutional investors paid in March.  We are placing a target of $2.00 per share representing a potential gain of 33% gain from today's closing price.

When we first read about this company our initial thought was the number of biotechs working on breakthrough treatments are everywhere.  What makes this company different?  The answer is CIBA Vision, whose parent company is Novartis (NVS).  It's not everyday you find a small company with a partner that did $20 billion in revenue in 2002.

Novartis paid $2.00 per share like the other institutional investors in the most recent private placement.  This small cap must be on to something or else a multinational conglomerate of this size would not give Refocus the time of day.  Readers have an opportunity to own shares of Refocus at prices far better than what Novartis.  This window of opportunity may not last as word of this technology reaches the masses.  In January Business Week featured the technology in an article titled "Put Those Glasses Away For Good".

Refocus hopes to begin Food and Drug Administration (FDA) Phase II clinical trials by the end of 2003.  In addition a European commercial launch could occur in the latter part of this year.  Today's announcement that Refocus Group's New Automated PresVIEW Scleral Incision System Receives European CE Mark Approval means that company is closer to reaching the two goals mentioned above.

Blockbuster Partner

In summer of 2001, CIBA Vision, began an extensive period of due diligence on Refocus Group's PresVIEW technology and concluded that the PresVIEW Implant and related PresVIEW System represented significant market potential.

Refocus Group entered into an agreement with CIBA Vision in March 2002, pursuant to which CIBA Vision has the right to obtain an exclusive worldwide license to market, distribute, and sell Refocus Group's PresVIEW SSP technology for presbyopia, ocular hypertension (OHT), and primary open angle glaucoma.  Under this agreement, CIBA Vision will market Refocus Group products under the PresVIEW trademark.

Terms of the agreement with CIBA Vision call for Refocus Group to receive a percentage royalty on CIBA Vision's worldwide net sales of the PresVIEW System and related products. CIBA Vision also has agreed to assume responsibility for the legal defense of Refocus Group's worldwide PresVIEW patent portfolio against patent infringement, subject to mutual agreement.

CIBA Vision's strategy for Refocus is as follows:

Build awareness credibility among leading opinion medical doctors on the totally re-engineered procedure and product.
In Europe, where it currently has a CE Mark, CIBA Vision has announced its intent to establish seeding Centers of Excellence (COEs) in several countries by the end of 2003.
In Canada, CIBA continues to seek regulatory approval and also establish several seeding clinical or commercial COEs by the end of 2003, subject to Health Canada approval.
In the U.S. the next step is to begin Phase II FDA clinical trials, which the Company expects will occur later in 2003, subject to FDA approval.
CIBA Vision's parent company, Novartis AG, is a world leader in pharmaceuticals and consumer health. In 2002, the Group's businesses achieved sales of $20.9 billion and a net income of $4.7 billion. Novartis Group employs approximately 72,900 people and operates in over 140 countries around the world.
Procedure

Refocus Groups newly evolved PresVIEW SSP is an incision based procedure that employs four separate plastic segments, each about the size of a small grain of rice, made from polymethyl methacrylate (PMMA). PMMA has been implanted safely in or on the eye for unrelated surgical procedures or devices, such as hard contact lenses, for more than 50 years. The PresVIEW SSP is a relatively painless procedure, which takes less than one hour (approximately 15 to 30 minutes per eye). The procedure requires local anesthesia and is believed to produce virtually no side effects, with the exception of redness around the eye, which lasts from two to four weeks.

The PresVIEW System employs a mechanical blade to make four superficial and uniform incisions in the quadrants of the sclera (the tough white outer coat of the eyeball). Ultrasound mapping is used to identify the precise location for each incision prior to actual surgery. The PresVIEW PSI is then inserted into the superficial pockets or tunnels, causing a lift in the sclera that in turn reduces the crowding of the underlying muscles surrounding the crystalline lens.

Some effects of Scleral Spacing Procedure (SSP) are instantaneous. Immediately following the surgery, many patients are able to read the fine print in newspapers and phone books in the operating room. For other patients, some follow-up exercises may be beneficial in helping strengthen the ciliary muscles that may have weakened do to lack of use in recent years.

Refocus Group has already conducted Phase I feasibility clinical trials at the Barnes-Jewish Hospital at the Washington University School of Medicine in St. Louis, the Dean A. McGee Eye Institute at the University of Oklahoma in Oklahoma City, the New York Eye and Ear Infirmary in New York City, the Jules Stein Eye Institute at UCLA in Los Angeles, the Stanford University School of Medicine in Palo Alto, and the Storm Eye Institute at the Medical University of South Carolina in Charleston.

Consolidation In The Eye Care Industry

While we were conducting due diligence on Refocus we learned how incestuous the eye care industry has become.  The current President and Chief Executive Officer of Refocus Group is Terry Walts.  Previously Mr. Walts was a Senior Vice President of Sales and Marketing for CIBA Vision.  After leaving CIBA, Walts became a Director and Chief Marketing Officer for Autonomous Technologies, a refractive laser surgery startup until 1998.  Autonomous previously traded on the Nasdaq under the ticker symbol ATCI.  ATCI subsequently was bought out by Summit Technology who at the time also traded on the Nasdaq under the ticker BEAM.   At the time of the merger CIBA owned 15% of Autonomous.  To make things even more interesting Summit was bought out by Alcon Laboratories.

Does the future hold the same path for Refocus like many of its peers?  If the company continues to prove that its PresVIEW SSP is indeed effective in correcting presbyopia then it won't matter if acquisition is the end result.  Refocus is relatively unknown in the investment community but with a partner like Novartis it will be hard for the company not to get attention.
 
 

Buy up to $1.60 per share, This is a significant discount to what institutional investors such as Novartis paid for shares of Refocus.  Make sure to use limit orders.   If the stock gaps up do not chase it.  Wait for a pullback and look for an entry at $1.60 per share.  
Stop Loss, stop loss orders not permitted by most brokerages on OTCBB stocks.  Readers should use their own discretion and risk tolerance.  The company's 52 week low is $1.25 per share.
Target Price $2.00, the company raised $5.75 million in a private placement at $2.00 per share in March.  

Their customers include the NY Yankees, Denver Broncos, the Mattel and Fisher Price company owned stores, 300 of the largest museums in the United States, Zoos and Theme Parks, and the New Balance company owned stores.

There are only 3.1 million shares issued and outstanding. The company enjoys about $20 million in annual sales and positive cash flow. In fact, according to the June quarterly financial statements, the company's balance sheet now has hit the $3.48 per share mark in cash ($11 million) with no debt.

Therefore, at about $5 per share you are only paying about $1.50 for the business, or $4.5 million in valuation. $4.5 million for a company with $20 million in annual sales, 10,000 customers, and positive cash flow is a steal.

I still believe the stock is worth at least $8. However, it is not really a trader. You just have to put it in your portfolio and wait for the market to recognize the value. If you want to buy this stock, use a limit order.  You are buying in the open market right along with the CEO.

As it exists today, NetWork Installation is on track to deliver $2.5 to $3 million in revenues this calendar year. They have positive cash flow from operations.

Their early customers were K-12 school systems. They have expanded dramatically in the last several years. Here's a list of their current existing customer base. I'm sure you will agree, it is impressive:

Los Angeles County
Orange County
UCLA
USC
Nearly every school district in LA, Orange, and San Diego Counties
Safeway and Vons
Travellers
Cisco
IBM
SBC
UPS
WalMart
Wells Fargo
and many more (that's enough for now)
NetWork is considered the premier source in Southern California for any business or institution's technology needs. Want a video conferencing system? they will install it. Want a broadband network? they will install it. Want a Wi-Fi hot spot on Campus- they will install it and maintain all of it. You can visit their corporate web site at www.networkinstallationcorp.com.  
  NetWork's Expansion To Wi-Fi - It Starts Now  

On Friday, just after the market closed, NetWork Installation announced they had been approved by Motorola (NYSE: MOT) to become an Authorized CanopyTM Solutions Provider. Click Here to learn more about Motorola Canopy.



The Motorola Canopy, which you see pictured here, is the latest and most powerful generation of Wi-Fi infrastructure technology. This device was 10 years in design and testing, is very easy and inexpensive to install, and very powerful.

Unlike the "Hot Spots" you see at places like Starbucks where the broadband internet access range is only about 300 feet, the new Motorola Canopy has a line of sight range of two miles.  

NetWork Installation is now going to start moving into the WISP business (Wireless Internet Service Provider). With the Motorola Canopy as their infrastructure backbone, NetWork can provide broadband internet access for homes and businesses very inexpensively. Broadband access for speeds equivalent to T-1 can be provided to customers for as little as $400 per month. Cable modem speeds can be easily provided to households with no hard wiring required.
  Conclusion  


As I stated last weekend, NetWork Installation is a Wi-Fi idea no one knows about. You are the first. The company's business history, expertise and solid customer base offer protection against the downside risk. The expansion into the Wi-Fi market offers unlimited upside potential.  

There are just under 11 million shares issued and outstanding, but only 450,000 are publicly traded as of this time. This stock could be quite volatile as the audience grows and it begins to trade.

Wi-Fi is in its infancy. It reminds me of analog cellular in the early days without the enormous upfront infrastructure costs. WISPs are ideal for the millions of internet users in rural areas who do not have broadband access. I described in last weekend's edition on the Wi-Fi revolution. Click here to read that edition if you missed it.

I haven't included a chart of the stock because there is no trading history to look at. Basically, the stock is about $1 and has been for a few months. Volume is extremely limited as no one knows about it. There isn't much information published on the company yet- but it's coming.

I strongly recommend you establish an initial position in this stock immediately. There will be a lot of corporate activity over the coming months as the company expands into the Wi-Fi arena setting up both WISPs and installing Wi-Fi infrastructures for their massive existing customer base.

Out For a Kill- This Steven Segal thriller is also in post production right now. Studios will be reviewing the film soon, and it is expected to go to major theatrical release. Family Room has 10% of the producer profits on this film.
Belly of the Beast- This is the third Steven Segal thriller produced by Family Room, has been filmed in Thailand. This film is also expected to go to major theatrical release. Family Room also has 10% of the producer profits on this film.
Micronauts- Two weeks ago we covered this project. Family Room has acquired the rights to Micronauts, a very popular comic book and TV series from the late 70's and early 80's. In partnership with Hollywood heavy weight Gale Anne Hurd, Family Room intends to develop a feature length film, a TV show, and merchandise the brand. Hurd is the highly acclaimed producer of Terminator, Armageddon, and the Hulk. She is considered one of the most successful producers in the comic book/fantasy genre. Family Room and Hurd are now "pitching" the projects to the major Hollywood studios for partnerships and financing.
Red Skelton Direct Marketing Project- As previously announced, Family Room is entering the direct marketing business. The company is producing commercials to market episodes of the Red Skelton show on VHS and DVD over cable networks. Commercials should start running in about two months.
Snakeskin- Emmet/Furla will produce Snakeskin- it is a movie about a man who specializes in acquiring rare antiquities for the highest bidder and must hunt down his genetically enhanced ex-partner who has stolen a package that could change the balance of good and evil in the world. Snakeskin will be directed by Dario Piani. who has been directing commercials for Ferrari and Mercedes Benz. The movie is beginning the casting process now, and they expect to begin filming by the end of the summer.
Love Song for Bobby Long- directed by Shaniee Gable and which stars John Travolta and Scarlett Johansson. "Love Song for Bobby Long" is currently filming in New Orleans.  
Control- which begins filming in August, starring Matt Dillon, Willem Dafoe and Michelle Rodriguez.

In our July 28 edition, Making Telecom, Nanotech & Biotech Baskets, we illustrated how diversification can lead to tremendous gains.  Owning companies of different market capitalizations, multiple sectors, and holding them for different time frames is a creed all of our readers should put to heart.  This is why we introduced "baskets" when presenting ideas to our readers.  Baskets are groups of companies that are either in the same sector or have similar characteristics.

We decided to take a look at how well these baskets have performed and the numbers were quite compelling.  Nineteen out of twenty six companies saw an average gain of 61.54% while the remaining seven had an average loss of just 4.26%.  Try finding these types of results in any other online newsletter.

What is the next basket that we should focus on?  We asked readers and received hundreds of ideas with our favorite being buyout/takeover plays.  This basket idea makes perfect sense right now because the pending market decline will mean the opportunity to enter positions at better prices.

Our readers have often provided us with many great ideas.  We have so far come up with four companies that look ripe to be taken over.  Unfortunately, one of them had to be removed from our preliminary basket because it was bought out today.  Mercator Software (MCTR) was purchased by Ascential Software Corp. (ASCL) for $106 million.  Ascential said it would begin a cash tender offer for Mercator's shares, offering $3 per share, a 22% premium over Mercator's latest share price.  The premium is somewhat deceiving because rumors of a buyout has been floating around with shares being bid up significantly since trading at $1.58 per share less than three weeks ago.

Could the other companies in the basket experience the same kind of appreciation?  We certainly think so but buyout plays sometimes take a long time to come into fruition.  Our goal is to come up with as many qualified stocks as possible to put into the Buyout Basket.  We are looking for companies of all sizes in every industry.  This is a daunting task but certainly one that can prove to be very profitable for readers.

As always we appreciate feedback from readers and if you have a buyout play that looks interesting let us know by sending an email to editor@smallcapmarketwatch.com.

Pluristem Comments On Cord Blood Stem Cell Act of 2003

Pluristem Life Systems (PLRS) issued a press release today in regards to how HR 2852 (Cord Blood Stem Cell Act of 2003) a bill introduced to the U.S. House of Representatives could be advantageous to the company.

More and more companies are finding the virtual reality promotion and advertising provides an outstanding return on investment in a high impact format.

While VirTra Systems continues to aggressively pursue the "Use of Force" Training market, but investors should not overlook the advertising and promotions market. The company is also aggressively pursuing new business in that arena. The success of the Pennzoil tour and now the Red Baron tour has opened many doors for VirTra.

The stock is probably entitled to bounce back into the $.10 to $.12 range on this news.

I recommend you go to the company's web site and sign up to be included on their mailing list. Click here to go directly to the form. The company will automatically update you on unfolding events once you are on their list. Full text of the news release can be found at the bottom.
  Amnis Systems (OTC BB: AMNM)- Press Release Provides Clue to the Future  


Amnis Systems was in the news earlier this week with a reseller distribution agreement. I didn't have a chance to cover the event, but quote in the press release bears reprinting. As follows:

"Amnis is on target to sign a minimum of four (4) new resellers in the third quarter of 2003," said Scott Mac Caughern, President and CEO of Amnis Systems, Inc. "Our order pipeline continues to rapidly recover as new order input for the fourth quarter of this year is expected to double the third quarter's orders."

One can surmise from this statement that Amnis will enjoy accelerating sales for the remainder of the year, with the 4th quarter bringing a climax. Amnis is another stock which is probably oversold.

Why is the SmallCap MarketWatch focusing on Bluefly?  We took a look at the stock's chart and noticed that shares of the company spiked every few months in the past year.  What was the cause?  Well...it seems that every time Bluefly announced that Soros put in more money the stock would have a nice short term spike.  Take a look at the press releases and the corresponding figures below:

July 17, 2003 SOROS MAKES ADDITIONAL BLUEFLY INVESTMENT
May 22, 2003 SOROS MAKES ADDITIONAL BLUEFLY INVESTMENT
March 14, 2003 SOROS MAKES ADDITIONAL BLUEFLY INVESTMENT - Bluefly Receives $2 Million, Eliminates $3 Million of Debt, and Gets Commitment For Another $1 Million
The average return for the stock on these three financing announcements has been 46.07% but this figure is based off of the stock's high for the day.  The bottom line is that people who owned shares of Bluefly when the Soros funding announcements have been made reaped small fortunes.


The Dilution Factor

The Soros and Bluefly relationship intrigued us so our next step was to dig into the company's SEC filings.  What we found was quite interesting.  To date, Soros has invested about $53 million in the company and holds 89.9% of Bluefly's outstanding equity. Including all options and warrants held by employees and others, Soros owns about 76.5% of the equity.

Bluefly closed Thursday at $1.05 per share giving the company a market capitalization of $11.6 million based on 11 million shares outstanding.  That is actually a very low valuation given that the company has $0.23 cents per share in cash and $30 million in sales for 2002.  This is where most investors will make their mistake.

The $53 million Soros has put into Bluefly may give the impression that the company is cheap but people may not realize that the billionaire financier owns preferred stock that can convert into common stock.  There are currently only 11 million shares outstanding but there are five rounds (A-E) of preferred stock that can convert into 43,323,430 common shares.

What's The Company Really Worth

The Series A-E convertible stock plus the current 11 million outstanding would be a grand total of 54,323,430 shares.  $1.05 per share would equate to a market cap of approximately $57 million dollars.  However, if you take the current market capitalization of $11.6 million and divide by the total number of potential shares then the price is more like $0.22 cents per share.

What's the company really worth?  The number is somewhere in between but let's compare Bluefly to Amazon.com (AMZN).  Bluefly is not profitable so we'll take a look at the price to sales ratio, which is widely used for internet companies.  Amazon currently has a market cap of $15.5 billion, which is 3.47 times its trailing twelve months revenue.  Bluefly has $31.2 million in trailing twelve months revenue and based off of the convertible diluted scenario the company would be trading at 1.82 times sales.  Before you think Bluefly is undervalued keep in mind that Amazon is the dominant e-commerce player with billions in sales and also has profits.

Soros is undoubtedly a genius when it comes to finance so is he onto something or just making a bad decision with Bluefly?

How To Play This

Looking at this company from a long term perspective its clear that Soros is the lifeline.  He can choose not give Bluefly any more money but if this were the case he probably would have cut them off a long time ago.  This is still a significant risk because the end result would be bankruptcy.  However, knowing that Soros owns all this preferred stock makes it less likely that he would choose not to fund the company in the future.

If we look at Bluefly from a short term trading perspective the last three financing announcements have created spikes in the stock that have averaged 46.07%.  Its impossible predict the exact date when the next round of financing will be announced but based off of the last three we should be a month to two months away.

The stock's 200 day moving average (DMA) is at a $1.00 and there is significant support for the stock there.  Keep in mind Bluefly needs to maintain a buck or risk being delisted.

We chose to write about Bluefly because it represents a stock that you could potentially trade three or four times per year for some nice gains.  We'll be monitoring this company in the future and we suggest readers do as well.  The key to short term trading is to accumulate enough of these ideas so that there are opportunities arising on a constant basis.

We saw a high trade of $2.20 the morning after this week's trading alert, which was below my $2.50 target and a bit of a disappointment. I was hoping the stock would open a little more favorably, and then trade up like NWIS and IMTO. Instead, we opened high and went down. However, I was looking for this move sometime over the next 30 days. If the company delivers additional reportable corporate events over that time frame, we could still hit the target. In the interim, there seems to be resistance at about $2, which could give way with a couple more high volume days. Perhaps the stock's inability to hold above the $2 level will end up being an opportunity for those looking to accumulate.

Click Here to listen to the Irvine Sensors conference call.
  The Dog Days of August and the Summer Grind- Where Are We Headed?





We're smack dab in the middle of the Dog Days of August, and both price movement and volume on all the major exchanges are anemic to the point of a near coma state.

The market has been grinding sideways in a very tight range since the first week of June. After a three month move which took the NASDAQ up 40%, it is entitled to go through a period of "digestion".

All of the action this summer has been in the bond market, which woke up one day and decided to believe in the economic recovery. Over a three week period bonds got slaughtered. The yield on the 10 year jumped from 3% to 4.5%. This represents a 50% move to the upside in yields, and a massive drop in value.

The bond market has stated in no uncertain terms it is prepared to believe in the economic recovery. The FED can only control extremely short term levels. The long end of the curve, which relates more to the interest you and I pay on debt or receive in interest payments, is controlled more by market forces. Interest rates are climbing because the market believes interest rates won't need to be so low in during an economic recovery phase.
  A Look at the NASDAQ  


Back on July 22nd I published an edition entitled "Are the Bulls Back in Control?". In that edition, we looked at some simple technical indicators, specifically trend lines and measures of support and resistance.

Let's look at where we are today, and try to figure out where we go from here.
 



Here's a chart of the NASDAQ going back to the big run which began in early March. The NASDAQ appreciated a full 40% during this move. I've drawn in the uptrend line. The market displayed a willingness to bounce off the uptrend line until it breached it convincingly at the end of July.

In my opinion, the breaching of the uptrend line for several days signaled a trend reversal, meaning one could expect the market to either pullback or grind sideways for sometime. Does this mean the Bull Market is over?- No, it only means we were entering a long overdue and healthy period where the market will consolidate some of its gains. So- how far will it pull back?
 



Here's a chart drawn over the same time frame with support/resistance lines drawn in. Since the trend has been broken, I now believe a healthy retracement or "digestion" period is in the cards.

The three red lines in the middle represent various levels of potential support. The market is entitled to give back 30% to 50% of its gains, and still be in a long term uptrend. A pullback to the top line will signal about a 35% retracement, and a pullback to the middle line would signal a 50% retracement.

If the NASDAQ does pullback into the 1500 to 1550 range, I believe this move would represent a very strong buying opportunity at a low risk entry point. If the NASDAQ were to drop below the bottom of the middle three red lines, I would tend to believe the Bear Market was not over, and we were in for further price erosion.

So- why the optimism?
  And The Market Grinds On  




This chart of the S&P 500 shows just how long we have been grinding in this tight range. The S&P broke above 960 in early June. Since then it has challenged 1015 twice, and challenged 960 twice, only to grind its way right back into the middle at 990.

This extended period of grinding will inevitably lead to a major break in one direction or the other. The longer the period of congestion, the more violent the inevitable move will be.

Right now, I believe the next major move will be to the upside. My view is biased by my natural bullish inclination- I love the market. Despite the nasty three year Bear Market, investors would do well to remember that over the long term, the market spends a lot more time going up rather than going down. Because stocks go down a lot faster than they go up, bear markets cause a lot of psychological damage.

My belief the Bear Market is over is based on earnings growth. After an extended period of damage, earnings are growing again. Here's are some recent statistics which support this claim:

12 month trailing operating earnings for the S&P 500 stand at $49.74 cumulatively. According to Thomson Financial, analyst estimates of future operating earnings for the S&P 500 over the next 12 months now stand at $57.89- this equates to 16% growth in operating profits- Fuel for a bull market.
June's trade deficit came in lower than expected- probably as a result of the declining dollar- a positive for the economy. (the number was 39.5 billion; analysts were expecting 42 billion)
Retail Sales for the past two months were recently revised upwards.
Weekly initial jobless claims have finally fallen below the 400k mark, suggesting the economy has stopped losing jobs.
The recent Kansas City Fed Manufacturing survey for July had new orders surging to a new high at 24 and both Average Employee Workweek and Number of Employees turned positive (reading 4 and 3 respectively) for the first time since February and June '02 (also respectively).

The March to June rally should be considered the "Hope and Faith" rally. It was based on faith that fiscal stimulus would finally begin to work. Since faith could be defined as hope in the absence of data, it seems faith paid off.

The earnings growth and positive economic reports that are now coming in were already priced into the market during the hope and faith rally. The market may take some time finish digesting those gains.

With earnings season over, the market will turn all of its attention the economy. If the numbers keep improving 3% GDP growth will not be far behind, and higher stock prices are on the horizon.

Network Installation announced today that it has been awarded a $228,000 contract  from the Placentia Yorba Linda Unified High School District.  

Also, the company announced its June quarterly revenues came in at about $200,000. While this number may seem low for a company enjoying approximately $3 million in annual sales, please note that this $200k number only covers the five week period from the May 23rd merger date to the end of June. Evidently, the company is only publishing its financial results from the time the merger was completed via reverse take over and they became a public company. $200K over five weeks suggest $2 million plus over 52 weeks. The September's 10Q will be our first comprehensive look at their financial condition.

I'm anticipating considerable news flow on their move into the Wi-Fi arena over the coming months, which should bring an enhanced audience to the stock. In the interim, investors would do well to remember there is a very small public float, and therefore the stock could be very volatile. Accumulate- but use a limit order. I would suggest anything under $3 would be reasonable at this juncture. Stay tuned for more developments.

Through the power of numbers the PEO has the ability to negotiate better pricing on many employee related costs like health insurance, pension plans and 401K's, workmen's comp, etc. This allows the client companies to offer employees better benefit packages for the same dollars.  

A PEO with 4500 employees generates about $350,000 per day in cash flow, and $25,000 per day in gross profits. IMTO has achieved that level. The infrastructure is in place, so incremental increases in business yield higher margins at the bottom line.

I published a Trading Alert on IMTO on July 11th. The stock opened the following day at $.023 and throughout the course of the day found its way to $.04. It traded 34.3 million shares.

If you bought early you could have made 70% on your money in one day. Amazing- If the stock had been $2.23 and hit $4 that day, the world would have taken notice. If the stock had been $22.30 and hit $40 that day, they would have been calling for an interview on CNBC. Nevertheless, the return to the investor is the same.
  IMTO Back in the News- Reports Major New Contract in Medical Division  




It's time to take another look at IMTO. They were back in the news today with major new contract signings. They are beginning to penetrate the PEO market in the medical industry, and are starting with contract nursing services to acute care facilities and hospitals in Arizona.

IMTO has received approval for a proposed contract with Tempe St. Luke's Hospital beginning this month. St. Luke's is part of the ASICS Hospital Group, which consists of five hospitals in the Phoenix area. The Company has received an initial contract with the ASICS Group, which is forecast at $300,000 for the next 9-12 months.

IMTO has current proposals under review to an additional 10 hospitals in the Phoenix area, which are anticipated to be approved in the next several weeks. These additional agreements are forecast to provide $1 million in annual revenues.

In short, the company is continuing to add employees to its services and therefore growing rapidly.

The stock has completed a pull back and found support in the $.025 range. As you can see from the chart, the stock has pulled back into the middle of its support level, suggesting it has digested its past gains and is poised to start climbing again.

As this company continues to grow, the stock will no doubt want to challenge that $.04 level once again, which is 70% higher than today's closing level. Today's news release, which came out after the close, will probably give observers the opportunity to see if $.04 is still resistance, or simply gives way to higher levels.

IMTO mal anschaulich, geschlossen heute mit 20% Aufschlag bei 0,29.
Etwas mehr deutschen und eigenen Text von Dir wäre nett, wenns machbar ist.

chart.bigcharts.com/bc3/quickchart/...71&mocktick=1&rand=4917"

Gruss E.

The Use-of-Force simulator market is huge and growing along with terrorism and the international turmoil. Competitors with inferior products who were earlier to market have seen sales grow dramatically in past years. Firearms Training Systems, with their simple two dimensional simulator, does about $40 million in annual sales. Interactive Training, Inc does business in 40 countries and also enjoys millions in annual sales.

Pictured here is the portable version of VirTra System's new 3d use of force training simulator; the only one on the market providing a true 360 degree training environment, complete with sight, sound, smell, and the trainee's ability to use the actual weapon to be used in the field, not some plastic version. They have the product. The next step is sales coupled with price appreciation in the stock. Today, they made a major step in that direction:
  VirTra Systems Hires "Best of Breed" Sales Manager  




Today, VirTra Systems took a quantum leap towards getting the new Use of Force Simulators to market. VirTra announced it had hired Michael Kitchen to head up the national and international sales force for this brand new product line.

According to the press release, Michael Kitchen jumped ship from competitor Interactive Training, Inc to join VirTra Systems. The press release further stated that "Mr. Kitchen and his worldwide distributor network have sold several hundred simulators to military, security, and law enforcement agencies in over 40 countries."

Apparently, Mr. Kitchen feels the VirTra has developed a "better mousetrap". In the press release, he states that "I'm convinced the company will soon lead the industry with our 360° multisensory situational awareness and judgmental use-of-force firearms training products.”

I'm still a believer that Virtra Systems can easily find its way into the $.20 to $.25 range if and when they begin to sell these new systems. The stock tripled off the lows after they unveiled this new line of products. They now have a sales manager with an extraordinary track record in 40 countries including the United States. The stock will undoubtedly gain traction along with the company. Along the way you look for little clues which could lead to success. The company delivered a pretty big clue today.

Readers have emailed us about how we picked these two companies and for that matter any company that we feature in the SmallCap MarketWatch.  Our answer is quite simple...a tremendous amount of due diligence coupled with experience and also a bit of chart reading.  Sounds easy enough but everyone knows it's easier said than done.  That is why in today's edition we will illustrate to readers the process that we went through in evaluating ScanSoft and Hollywood Media.

ScanSoft (SSFT) was a very attractive situation because the company had warned that they would miss revenue and earnings estimates on August 6th.  Overnight the stock dropped from the previous day's close of $4.83 per share to $3.70 per share.  That is a pretty big haircut but things got worse when shares hit an interim low of $3.32 per share.  Volume was obviously very high with over 8.5 million shares changing hands in three days.  Then the stock stabilized at the $4 dollar level and that is when we decided the timing couldn't be better.

The bad news was already out and the only catalyst for the company was the actual earnings announcement.  It was very unlikely that any more negative items were to be reported so the potential for upside news was very high.  The company had announced that it closed its merger with SpeechWorks five days after the earnings warning.  This set the tone because if you were ScanSoft wouldn't you want some good news to follow the announcement that you have completed a merger?

The first of the many press releases came on August 19 when the company announced that had inked a deal with the Social Security Administration (full press release).  This was followed the next day by the naming of a new chief financial officer (full press release).  Then yesterday the big daddy announcement that ScanSoft teams with Microsoft to enable paperless medical records by integrating speech scanning helped move the shares up over 7% (full press release).

Now here comes our thinking from the short term perspective.  You have a company that was at $4.00 per share with support at the $3.65 levels that had all the bad news out.  It would make sense that good news was to follow since the merger was done.  Remember that after a merger there is always good news announced to make shareholders on both sides a little happier.  Long term the new ScanSoft expected 2004 revenues of $200 million and earnings of $0.42-$0.43 per share.  Thus, the company was tremendously undervalued based on those expectations and if there was ever a time a long term investor wanted to own shares it would be when we released our edition.

The returns generated by this idea yielded an interim high of 20.25% and a current return of 16.5%.

Hollywood Media (HOLL) was more of an experience call than anything else.  Shares of the company traded at the $1.30-$1.50 levels the previous two months but tanked as the company got close to reporting its second quarter earnings.  There was no specific reason for the decline other than shareholders selling and when the earnings were reported nothing happened.  It was rumored that one of the institutions that owned shares of the Hollywood unloaded its position and that caused the previous few weeks decline but we don't know this for sure.  Either way the stock drifted down to a dollar where it was floating at a major support level and also 200 day moving average of $1.03 per share.

The company seems to have a history of violent moves in its stock and the reason is its interesting shareholder base.  There are currently 20.9 million shares outstanding with 19.3 million in the float.  Institutions own 66% of the company (view institutional holdings), which is approximately 77% of the float.  Coupled with the 8% that insiders own this means roughly 3 million shares are in the hands of the public.  This means that the low number of tradable shares makes this a highly volatile stock.  As traders know, volatility creates price moves which generate opportunities.

Looking to the long term horizon, what attracted us to Hollywood Media was more fundamental than anything else.  It's rare to find a $20 million dollar company with such a diverse foothold in different aspects of media.  We stand by our assessment that this is world's cheapest full fledged media company.  The chart as well as the tape told us that the company was due for a bounce.  The challenge would be to get past the resistance levels at $1.25 per share but surprisingly this level has now become a support level.  If you missed our edition on the company we suggest you take look because it's worth reading (full edition).

It came as a surprise that Hollywood Media proved to be such a successful play so quickly.  It's interim high of $1.33 per share equals a 24.29% gain from when we wrote about the company when shares were trading at a little over a dollar. With over $60 million in revenue per year the company is valued at approximately .4 times sales.  Long term the potential for this company could be a market capitalization more in line with other media companies.

The SmallCap MarketWatch tracks hundreds of stocks.  Our goal is to present great risk to reward ideas that have the potential to benefit subscribers.  Not every one of them will turn out perfectly but if you look at our track record we are most certainly right much more than wrong.

  Irvine Sensors (NASDAQ: IRSN) Delivers Big News In a Small Package



If you're looking for a little excitement from Irvine Sensors, they delivered the goods on Friday morning. Much to my disappointment, there hadn't been much coming out of the company for the last several months. Last week they unveiled their new BGA stacked product, which has the potential to take the company to a whole new commercial level. Friday they delivered more.

This company is like a duck. It appears to be cruising along serenely on the water. You don't see their feet peddling wildly below the surface.



You are looking at the world's smallest fully featured computer, and it was unveiled by Irvine Sensors this past Friday morning. It is powered by an Intel® 32-bit SA-1110 StrongARM® 206 MHz processor. It has solid state memory provided by 8Gb of solid-state storage using 16 Samsung® Flash memory chips. In short, this mini computer has horsepower equivalent to many specialized use laptops.

As you can easily see from the picture, this computer isn't much bigger than a quarter. It's about 1 inch square and 1/2 inch high. It could fit inside a large wrist watch. This unit becomes a fully functioning computer when you attach a mouse, keyboard, and monitor.

Irvine Sensors is beginning to prove they are the kings of small and powerful in the computing world. I expect it to convert into recognition for the company, which hopefully translates to enhanced volume and appreciation in the stock.



As you can see from the chart, Irvine Sensors briefly touched off a new multi month high last week on the heels of announcing they were taking orders for the new BGA stacked memory products.  

I believe a few more high volume days like that one will peg the stock at a higher level. The stock needs more consistent high volume days. Introducing the world's smallest full featured computer is bound to bring some media coverage from somewhere, which could lead to the enhanced volume the stock needs.

This stock is a good value proposition. Although it's certainly not an apples to apples comparison, Intel is up 70% since the beginning of March, and Irvine Sensors is only up 24% since that day.

Intel trades at about 6 times annual sales, and Irvine Sensors is only trading at 1 times annual sales. Intel closed just over $27 on Friday, down from an all time high of $76. Irvine Sensors closed at $1.75, down from an all time reverse split adjusted level of $350 per share. Intel has shrunk in the last few years. Last fiscal year was the best Irvine Sensors had in their 20 year history, with revenues increasing 50% over the previous year to $15 million. Intel makes money. Irvine Sensors is still reporting small losses.

Look for announcements of sales of the new BGA stacked memory products to give the stock some traction. There are no guarantees, but management has a very high level of confidence that they are finally going to commercialize their $200 million 20 year investment in technology.  

Nothing ever goes straight up. Once the trendline was broken, the stock was entitled to pull back into the 50% retracement range off the move it had started in early May, which was when the stock was priced as if the company were about to close its doors.

New management and new money has the company humming and gathering momentum. Today, just after the market closed, Amnis announced it had received new orders from fourteen separate accounts during the first half of the third calendar quarter. Boeing, Hughes Networks, Best Buy, Matsushita (Panasonic) and Northrop Grumman are a sampling of customers purchasing Amnis Systems equipment in recent weeks.

According to company President Scott Mac Caughern, Amnis's revenue stream for the September quarter should double that of the June quarter. I believe this is just the beginning of a whole new era for the company. Momentum should continue into the Fall, but sales could really skyrocket when the company makes planned new product introductions before the end of the year.

The stock will probably begin a climb back towards $.15 now that the company has delivered very positive news and the stock has found support. However, I still believe the stock could see $.25 over the longer term.  

In studying the business model of Titan, I was amazed to learn there is a huge cottage industry associated with Printed Circuit Boards. When the engineers at Textron, Lockheed, or Motorola design a new electronic device, they must build prototypes long before manufacturing. They don't build the PCBs themselves. They send the specs to a shop which specializes in fabricating PCBs and turning around a finished product rapidly.  

Titan does this high margin work. PCB designs are received and a finished prototype is turned around in as little as 48 hours. The service costs a substantial amount of money, and has very high margins.  

Titan turned in the best quarter in its history in June, with sales hitting $3.27 million for the quarter, up 42% from the March quarter. They're customer base includes some of the following high profile names:

Motorola
Broadcom
Textron
Lockheed
Analog Devices
Raytheon
Flextronics
Titan has two major fabrication facilities. Their west coast operation in Fremont, California, which is the subject of today's news release, specializes in high volume, quick turn around for standard consumer electronics products. PCB prototypes can be turned around in about 48 hours, and may cost anywhere from $25,000 to $100,000.
Their east coast facility in Amesbury, Massachusetts specializes in more custom PCB's generally associated with military or very high tech solutions. At this facility, Titan provides input on the design. They can also fabricate PCBs in HVR (High Volume Rigid Flex). This specialized design costs a lot more, and is the kind of custom PCB you would find fitted into a tiny slot in the cockpit of an F-14 fighter jet or the Space Shuttle. Margins at this facility run upwards of 40%.
  Completed Consolidation Chops $1 Million off Annual Overhead  


Today, just after the market closed, Titan General announced it had completed a consolidation of two west coast facilities. Titan shut down their Santa Clara operation, and consolidated the two into one state-of-the-art facility.  

More importantly, the company announced it anticipated the consolidation would yield at least $1 million in annual cost savings. This is very important to Titan, because it positions the company to move into profitability in coming quarters.

Moreover, there is another important fact the press release does not tell you. I learned this from interviewing President Andrew Glashow. The  
Fremont California tech center of Titan is so well optimized that it is currently only operating at 30% of capacity with much improved margins. Therefore, as additional business flows in, it will be accompanied by even greater efficiencies which should result in higher margins as the current fixed expenses are already being absorbed.  

The new facility has now been approved by several major electronics companies including manufacturing behemoth Flextronics ($13.5 billion in annual sales), which should lead to major new business wins.

There are 14.5 million shares issued and outstanding. Based on the $1.20 closing price, this yields a market value of $16 million. Annual revenues are running at about $13 million, and growing rapidly. Cost cutting from the consolidation should turn Titan profitable, and revenues should grow. Assuming the company achieves positive cash flow, this stock would not be overvalued at two to three times sales, instead of the current 1.2 times annual sales, suggesting significant upside.



As you can see from the chart, no one knows about this situation yet. This is an undiscovered gem, just like Network Installation was on August 2nd. The stock has drifted down from the $2.25 level in April and rarely trades over 25,000 shares per day. The profit picture for the company's future changed with today's news.  

Here are my thoughts for today's trading alert:

Buy up to $1.40- This gives you room to make 40% if the stock performs the way I think it will
Price Target- $2 short term (next 60 days)- higher longer term
Stop Loss- Reevaluate if the stock trades below $1- I don't think it will, but you never know.  
Unless something earth shattering comes up, this will probably be the last edition I publish until after the Labor Day holiday. I intend to publish several follow up editions on Titan. Also, next week threatens to be very busy, as several of the companies I cover are promising substantive corporate events which will be worth reporting.  

NetWork Installation (OTC BB: NWIS) Secures Agreement With Vivato

Network Installation has settled into the comfortable $2.50 to $3 range after making its breathtaking two day run to $6 back in August. As I stated in several past editions, I believe the stock was well ahead of itself at $6, and was probably a better sell than a buy at that level. However, at less than half the price, the stock now offers significant upside potential as the company leverages its considerable networking experience to enter the exploding Wi-Fi (wireless internet access) market.

Today, just after the market closed, Network Installation made an announcement which solidifies another piece of the puzzle. The company announced it secured an agreement to become an authorized VAR (value added reseller) of the revolutionary new Vivato switches. Vivato is a private Bay area company which has secured $67 million in financing to develop wireless indoor and outdoor Wi-Fi routers.



The current technology, which is deployed in the typical "hot spot" you find at Starbucks or Borders Books has a range of about 300 feet. The new Vivato technology provides a range from 300 meters to 2 kilometers, and is being referred to as a "hot zone". Vivato offer products for both indoor and outdoor use. You can learn more about the company by visiting their web site at www.vivato.net.

When you couple the Motorola Canopy technology, which Network Installation announced it was approved for back on August 1st, with the new Vivato technology they announced today, you have the ingredients for state-of-the-art Wi-Fi solutions.



The Motorola Canopy provides wireless broadband internet access from a tower on line of sight with a range up to five miles. The Vivato switch then converts the Motorola access into a true Wi-Fi solution on bandwidth 802.11 with much higher ranges than the 300 feet currently available.

As disclosed in today's press release, St. John's University recently allocated $7 million to install a campus wide Wi-Fi solution. Once implemented, the University intends to offer virtual classes and lectures which will be broadcast over the Wi-Fi network.

NetWork Solutions already boasts USC, UCLA, and a number of other educational institutions amongst its customers. This is just one arena for expansion. The company can also provide the infrastructure for a WISP (Wireless Internet Service Provider), which would include a recurring revenue business model.

The final piece of the puzzle is in place. Stand by for developments as the company moves into the Wi-Fi arena. Accumulate at or below $3 for what I hope will be a move back to $6 on real fundamental developments.


  SHEP Technologies (OTC BB: STLOF) Provides Update On Progress  


Just before the market opened today, SHEP Technologies dished up its first corporate development in nearly two months since the company announced it planned to apply for an AIM listing on the London Stock Exchange and had appointed a new Chief Technology Officer.

I have received dozens of emails on SHEP, as it has become highly controversial. The stock went crazy in June, running from a low of about $.75 and achieving the $3 mark in a few short weeks.

This company has been the target of a smear campaign throughout the summer. Well known shill for short sellers Carol Redmond of Dow Jones has been bashing the company excessively along with several other powerless entities.

The run in June was probably the result of a "short squeeze" in the stock. However, if you look at the fundamentals of the company, you can easily understand why short sellers would be in the stock. After all, the company has no real hard assets, very little cash, and no revenues. In fact, as I stated in my first edition on SHEP, I didn't expect the company to generate any revenues in 2003.

With a market value north of $25 million you can't blame short sellers for taking an interest.

My view is simple. Nothing has changed since I first published on this company. I believe the stock is too risky for many investors. I believe their technology is very exciting and could eventually end up on millions of motor vehicles world wide. I believe everyone should own a few shares of this company is case they pull it off. I suggested 2.5% of your high risk capital be allocated for this stock, with an eye towards increasing your allocation to 10% over time. Click here to read my original edition on SHEP Technologies.

The detractors of the company have one disadvantage. I went to Detroit and drove the Lincoln Navigator which was fitted with the SHEP system. I saw it work. I don't know whether they will ever reach their potential. If they do, you will wish you owned a few shares.

I'm planning much more comprehensive coverage on this company either later in September or early October. This coverage will clear up many of the questions you may have concerning their direction. Stand by.

As I stated, Carol Redmond of Dow Jones has been bashing SHEP Technologies. She was also bashing Hi Energy Technologies (OTC BB: HIET) earlier this year. The stock dropped from $2.50 to $.25. Recently, on the heels of great fundamental progress, the stock has run all the way back to $1.50. You can't believe everything you read- either from Carol Redmond or the OTC Journal. Differing opinions are what makes a market.

  StockGroup Information Systems (OTC BB: SWEB) Gets $.60 Price Target  


On Tuesday morning, just prior to the market opening, unbiased Investrend analyst Ryan Fuhrmann placed a $.60 price target on StockGroup.

If you are looking for unbiased opinions on stocks, you won't find them at the OTC Journal. I am very biased, and won't report on a company unless I like it. I like StockGroup, and have since I started covering the company one year ago at $.19.

Sooner or later StockGroup simply has to take off. The stock has been stuck in the mud since January when it briefly attempted to eclipse $.40. Since then, the stock never trades below $.25, but struggles to trade above $.30.

Investrend has been projecting this stock will trade above $.50 for two years now. Sooner or later they are going to be right as long as the company continues to grow.

Look for StockGroup to finally trade at higher levels when you least expect it. If the company keeps growing at its present rate, eventually Investrend will be right.


  Titan General Holdings (OTC BB: TTGH)  


Last week's trading alert on Titan General has been a non-event so far. The stock traded heavy volume the following day between $1.30 and $1.40. This week it has stayed in that range on lighter volume.

I suggested a mental stop loss of $1 on the stock. You might consider raising the stop loss into the $1.15 to $1.20 range if the stock trades down to that level. I don't believe it will, but you never know. You cannot file a formal stop loss on the stock- you just have to watch it and sell if you see it trade down into that range.

The company is growing rapidly and should be able to deliver more compelling fundamental developments during September. My time frame for this idea was 60 days, so we still have plenty of time for a surge to the upside.

Family Room (OTC BB: FMLY)- Back in Theaters This Fall





Family Room was back in the news this morning with several positive developments which bode well for shareholders. The company announced that filming has begun in Eastern Europe on a film titled "Control". Ray Liotta plays the lead role, with Willem Dafoe (Spiderman) and Michelle Rodriguez (S.W.A.T., The Fast and the Furious) costarring.  

The news release went on to reveal that, "Wonderland" starring Val Kilmer, Lisa Kudrow, Kate Bosworth, and Dylan McDermott has been accepted into the 2003 Toronto International Film Festival and will have its world premier at the Festival. Emmett and Furla executive produced "Wonderland" which was directed by James Cox. Lions Gate will release the film theatrically in September.  

Family Room has a percentage of the producer profits for Wonderland. Lions Gate is distributing the film, and it will be in theaters. If the film garners audience acceptance, and does somewhere in the range of $25 million at the box office, Family Room is likely to enjoy some producer profits from the film, which will flow right to the bottom line.

Other projects in the pipeline of new properties also all hold profit potential for the company. Most of the current projects are listed in today's press release.

For immediate profit potential, management at Family Room is very excited about the remake of the Amityville Horror which was previously announced, and the Abominable Snowman project the company will coproduce with Ilya Sulkind of the Superman Series and Gale Anne Hurd, the producer from the Terminator Series and the Hulk.  

There has to be at least one big winner in the last of projects you will find in the press release below. I don't know which one it will be, but I do know that a $1 million profit payday on one of these projects turns into $.05 per share in earnings.

I still believe this stock will find $.25 before the end of the year. Some catalyst will drive this stock higher. In the meantime, very low risk entry point in the $.12 to $.14 range.

Today, shares of the company hit an intraday high of $1.43 per share riding the momentum from yesterday's news that Bluefly.com Net Sales Increase by More Than 26% in August.  Since we profiled the company less than a month ago the stock is up an interim high of over 36% and there is the distinct possibility of another Soros funding announcement around the block.

It Might Be Soros Time

This year the three Soros financing announcements were made on March 14, May 22, and July 17.  We can estimate from this schedule that another press release could happen in the next two to three weeks.  There is of course no guarantee that more funding will occur but Soros has invested approximately $53 million and holds 89.9% of Bluefly's outstanding equity.

Brink Of Breaking Out

Bluefly has shown incredible strength the past two trading sessions by reaching an intraday high of $1.43 which you can see from the chart below is the second highest point in the past six months.


Charts Courtesy Of Stockcharts.com

Now would be the best time for a Soros financing announcement to be made in order to keep the momentum going.  There is serious resistance at the $1.40 level but no so much as to suppress a rally with significant volume.

Late To The Party

Readers that own shares at our initial profile price of $1.05 per share are sitting pretty but current prices are 36% higher.  We are firm believers of not chasing a stock but everyone has their own levels of risk tolerance.

Ideally, shares will drift down in the next week or two so that people can get better entry points.  This may be unlikely if everyone anticipates a financing announcement which thanks to the SmallCap MarketWatch is now something many readers know.