Hot Penny Stocks – GMX Resources (GMXR)

Editors Note:  Because of the Thanksgiving holiday, we’re bringing you this issue of Zen Money News a day early.  We want to wish you and your family a happy and safe holiday!

 

It’s official… there will be no super committee budget decision. At least no deal delivered on time.  Add that on to Europe’s continuing sovereign debt crisis, and it’s no wonder why the markets continue to fall.

On Monday the DOW was down 248 points to 11,547. The S&P was down 1.86% to 1,192.

Although a lot of equities are suffering oil is remaining stable. Brent Crude is at $106.90 and WTI is trading at $97.40.

Today’s company is diversifying to take advantage of oil’s relative strength.

 

QUICK FACTS
Ticker                                        GMXR
Industry                                     Independent Oil & Gas
Recent Price                             $1.34
Market Cap                                $77.8 m
Shares Outstanding                  58.1 m
Average Volume                        735,418
Dividend Yield                            N/A
Website                                     http://www.gmxresources.com

 

COMPANY DESCRIPTION

GMX Resources is a natural gas and oil exploration and production company. They have two newly acquired oil plays in development.

One on the Bakken, targeting the Bakken & Sanish-Three Forks formation, was just purchased in January 2011. Another, in Wyoming’s DJ Basin, will target the Niobrara Formation. It was also acquired at the same time.

These acquisitions are part of a concerted effort by the company to diversify into oil.  Both of those new plays are estimated to be 90% oil.

The majority of the company’s natural gas interests are in the East Texas Basin, specifically the Haynesville/Bossier shale and the Cotton Valley Sand Formation.

 

FINANCIALS

GMX Resources’ third quarter numbers were released on November 3, 2011.

The company reported revenue of $28.4 million in the third quarter, down from last quarter’s $32.9 million. This is a decrease of 13.7%.  GMXR also reported a net loss of $65.9 million… a sharp decrease from last quarter’s loss of $11.8 million.

As of September 30, 2011, the company reported $4.9 million in cash and debt of $341 million.

 

KEY METRICS ANALYSIS

Trailing P/E                                N/A
Price / Sales                              0.8 x
Return on Assets                      1.6%
Insider ownership                      8%
Short Ratio                                 6.7 x
Current Ratio                             1 x
Total Debt To Equity                   N/A

 

RECENT EVENTS

GMX Resources is a company in flux. This has been a watershed year because of their expansion into oil and the Bakken. GMX estimates there are approximately 600 potential wells just at the Sanish-Three Forks location.

The first wells were finished and began producing in the third quarter. That helped boost the company’s production by 32% year-over-year in Q3. The second well is scheduled to begin production in November 2011.

The company expects to eventually operate 52 North Dakota units. GMX anticipates an average working interest of 50% to 75% per well.

 

MANAGEMENT TEAM

Ken Kenworthy, Jr. – CEO
Michael Rohleder – President
Jim Merrill – CFO
Gary Jackson – VP of Land
STOCK ANALYSIS

 

 

 

 

 

Chart courtesy of stockcharts.com

 

GMXR’ 52-week low was $1.32 and the 52-week high was $6.48.  Right now the stock is trading at $1.34.  The 50-day moving average is near $2.11 a share and the 200-day moving average is at $3.51.  The company has a market cap of $77.8 million and 58.1 million shares outstanding.

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Hot Penny Stocks – Openwave Systems (OPWV)

News just came out about a new bet made by one of the most prolific investors of our time. Warren Buffet has apparently had his eye on tech. He just bought approximately 5.5% of IBM, or 64 million shares, for about $10.7 billion.

IBM obviously doesn’t fit the criteria of a small cap value stock. But if you’re looking for a tech for your radar with a more buyer friendly price tag check out this week’s pick.

 

QUICK FACTS
Ticker                                OPWV
Industry                             Application Software
Recent Price                    $1.61
Market Cap                       $137.6 m
Shares Outstanding         85.5 m
Average Volume               619,943
Dividend Yield                   N/A
Website                            http://www.openwave.com

 

COMPANY DESCRIPTION

Openwave Systems (OPWV) is synonymous with mobile internet usage. The company has approximately 200 patents related to smart devices, cloud technology and unified messaging.

The company has helped its operating customers accomplish a number of industry firsts including mobile browsing, photo-messaging, and the first Wireless Access Protocol (WAP) deployment.

Mobile data and bandwidth are in high demand. Openwave is developing ways for operators to get more out of their data capabilities and limited bandwidth. These operators, or communication service providers, include internet service providers (ISPs), wireless and wired carriers, and broadband providers.

 

FINANCIALS

Openwave’s third quarter numbers were just released a week and a half ago.

The company reported revenue of $52.4 million in the third quarter, up year-over-year from $41.5 million. This is a year-over-year increase of 22.3%. OPWV also reported a net income of $2.6 million… a sharp increase from last year’s Q3 profits of $71,000.

As of September 30, 2011, the company reported $23.9 million in cash and no long term debt.

 

KEY METRICS ANALYSIS

Trailing P/E                              N/A
Price / Sales                            0.8 x
Return on Assets                   -4.5%
Insider ownership                    10.5%
Short Ratio                               6.6 x
Current Ratio                           1.7 x
Total Debt To Equity                 N/A

 

RECENT EVENTS

On August 31 2011 Openwave filed a complaint against Apple Inc. (AAPL) and Research In Motion (RIM) with the International Trade Commission.

In Openwave’s complaint they accused both companies of profiting off of Openwave’s inventions. The company argued that some of the breakthroughs it developed became foundational to mobile internet technology. Openwave claims it has not seen any royalties from these companies they say utilized those advancements.

Openwave has compiled a pretty comprehensive list of offending Apple and Blackberry products. Including iPhones 3G, 3GS, 4, the iPod Touch, iPads, and Blackberry’s Curve 9330 and Playbook.

 

MANAGEMENT TEAM

Mike Mulica – CEO
Anne Brennan – CFO
John Giere – Senior VP, Products and Marketing
Sean MacNeill – Senior VP, Engineering and Global Services

 

STOCK ANALYSIS

 

 

 

 

 

 

Chart courtesy of stockcharts.com

OPWV’s 52-week low was $1.17 and the 52-week high was $2.67. Right now the stock is trading at $1.61. The 50-day moving average is near $1.58 a share and the 200-day moving average is at $1.91. The company has a market cap of $137.7 million and 85.5 million shares outstanding.

 

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Drug Manufacturer Drawing Attention

It’s shaping up to be another rollercoaster week in the markets. At the end of Tuesday the DOW was up almost 300 points from its low on Monday. Then Wednesday opened to a massive selloff.

Despite the volatility there are some interesting value stocks out there to keep on your radar.

 

QUICK FACTS

Ticker                                      ALTH

Industry                                   Drug Manufacturer – Other

Recent Price                          $1.47

Market Cap                             $155.4 m

Shares Outstanding               105.7 m

Average Volume                      257,446

Dividend Yield                          N/A

Website                                   http://www.allos.com

 

COMPANY DESCRIPTION

Allos Therapeutics (ALTH) is a biopharmaceutical company that develops, manufactures and markets cancer treatments. More specifically they focus on FOLOTYN, otherwise known as a pralatrexate injection.

Pralatrexate is a “small molecule” chemotherapy treatment that received FDA approval in 2009. This type of treatment is primarily for people with serious cases of T-cell lymphoma. FOLOTYN is administered during an outpatient procedure and delivered with an IV.

The company sells their FOLOYTN to wholesale distributors who then sell it to healthcare service providers.

 

FINANCIALS

Allos’ third quarter numbers were just released a week ago.

The company reported revenue of $14.2 million in the third quarter, down from last quarter’s revenue of $39.1 million.  This is a decrease of 66.3% from last quarter.  ALTH also reported a net loss of $11.2 million… a sharp drop from last quarter’s profit of $2.1 million.

As of September 30, 2011, the company reported $69.6 million in cash and no long term debt.

 

 KEY METRICS ANALYSIS

Trailing P/E                                       N/A

Price / Sales                                     2.3 x

Return on Assets                             N/A

Insider ownership                             1.6%

Short Ratio                                        5.5 x

Current Ratio                                    4.3 x

Total Debt To Equity                           N/A

 

RECENT EVENTS

During the third quarter Allos was nearly bought up by AMAG Pharmaceuticals Inc. (AMAG). The deal planned in October would have been a buyout at $2.44 a share. Another company was temporarily in the bidding at $2.20 a share but they pulled their offer off the table. ALTH shareholders would have received 0.12 shares of AMAG for each share of ALTH they owned.

Then later in October AMAG’s shareholders voted against the idea. That may have contributed to the resignation of AMAG’s CEO on November 4. The silver lining for Allos is the $2 million breakup fee they are owed by AMAG.

 

MANAGEMENT TEAM

Paul L. Berns – CEO

Bruce K. Bennett – Vice President, Pharmaceutical Operations

David C. Clark – Vice President, Finance and Treasurer

Bruce A. Goldsmith, Ph.D. – Senior Vice President, Corporate Development


STOCK ANALYSIS

 

 

 

 

 

 

Chart Courtesy of StockCharts.com

 

ALTH’ 52-week low was $1.28 and the 52-week high was $4.81.  Right now the stock is trading at $1.47.  The 50-day moving average is near $1.60 a share and the 200-day moving average is at $1.94.  The company has a market cap of $155.4 million and 105.7 million shares outstanding.

 

 

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Making Inroads Into Handheld Markets

It has been kind of a turbulent year for U.S. companies. But it’s always nice to see a company really starting to perform at the end of the year.

That’s the story of today’s company. They’ve adjusted their business plan to strengthen the long term viability of the company. Now they’re coming back stronger than ever.

 

QUICK FACTS

Ticker                                     ACLS

Industry                                  Information Technology Services

Recent Price                         $1.31

Market Cap                            $139.4 m

Shares Outstanding              106.42 m

Average Volume                     240,322

Dividend Yield                         N/A

Website                                  http://www.axcelis.com /

 

COMPANY DESCRIPTION

Axcelis Technologies (ACLS) is a Massachusetts based semiconductor company. They design and manufacture processing equipment, such as ion implantation devices, which are integral for certain types of chip fabrication.

So what is ion implantation? It’s pretty much using modern technology to speed up a bunch of ions and then launching them into a solid surface. Much like the crash tests you see in automobile commercials. The purpose of this is to actually change the physical, chemical or electrical properties of the solid.

The Ion Implanter side of the business brought in about $72.1 million in the quarter ended June 30 2011. It is the largest segment of Axcelis’ income statement, accounting for 77.2% of revenue.

 

FINANCIALS

This is not a company with a complicated statement of operations. Their revenue for the quarter was up from approximately $58.2 million last year to $93.4 million this year. Cost of revenue as a percent of sales has stayed pretty steady.

And even when the company’s revenue was up over 60% operating expenses were only up 18.6%.

Last year the company was running at a loss of $15.6 million, now they have a net income of $6 million.

Want another simplifying factor? This is a company with zero debt.

 

KEY METRICS ANALYSIS

Trailing P/E                                        12 x

Price / Sales                                      0.4 x

Return on Assets                               3%

Insider ownership                              1.2%

Short Ratio                                         7.6 x

Current Ratio                                     4.35 x

Total Debt To Equity                           N/A

 

RECENT EVENTS

The company took the last downturn as an opportunity to retool their entire product line. Their revenues have doubled, margins are now positive, and they’ve been profitable since Q4 2010.

Management values the world’s market for ion implantation to be about a billion dollars. There are three different segments in this market, high current, which accounts for 50%, mid-current for 35% and high energy for 15%.

ACLS recently released their new product, the Optima HDxt, which is a high current ion implanter. Management thinks offering this new product for the largest section of the market will increase their market share.

Another exciting thing about the HDxt line is what the company dubs ‘damage engineering.’ To put it in layman’s terms the ion implantation is done at a lower temperature. The purpose is to lower current leakage on better performing low power devices.

This is especially attractive for chip makers developing products for hand held devices. Catering to the tablet and smart phone industry is a good place to be right now and management knows it.

 

MANAGEMENT TEAM

Mary G Puma – CEO

Jay Zager – Executive VP and CFO

Bill Bintz – Executive VP of Engineering and Marketing

Kevin Brewer – Executive VP Manufacturing Operations


STOCK ANALYSIS

 

 

 

 

 

Chart Courtesy of StockCharts.com

 

ACLS has had a bumpy ride in 2011, despite the fact that their financials have drastically improved.

ACLS’ 52-week low was $1.00 and the 52-week high was $3.77.  Right now the stock is trading at $1.31.  The 50-day moving average is near $1.27 a share and the 200-day moving average is at $1.59.  The company has a market cap of $139.4 million and 106.4 million shares outstanding.

 

 

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