Where's the Small Cap Pick?

If you're wondering where our new small cap idea is, don't worry - we didn't forget it. We learned in the meantime the company would be announcing earnings this week. Given the opportunity to see more results before we put the name out there, we opted to hold off.

I know what you may be thinking...the earnings news may well be a bullish catalyst. Yeah, maybe, but that's not the 'big one' we see brewing - the earnings news may just be a little appetizer before the main course. Once we review the 10Q and any new fine print, then we'll make a decision to put the stock on our watchlist. Even then, we may hold off on an actual trade alert until the time is right (i.e. let's see if the news is actually as big as we think it could be). 

We know we're being picky, but that's the difference between good and great. The market hasn't been rewarding anything less than 'outstanding' lately. 

In the meantime, we've got another round of good news from a small cap stock that's already proven to be a winner. 
 

	The Spicy Pickle Train Just Keeps on Rolling

I'm running out of analogies to describe Spicy Pickle's (OTCBB: SPKL) methodical growth. That's a good thing though, since it means there's plenty of progress. The latest mental picture I drew in my head compares Spicy Pickle to Tiger Woods.

Whether you're a golf fan or not, you probably know bigger-than-life Tiger Woods is known as much for his intense focus as he is his incredible skill. No matter what, Tiger plays the same aggressive mental game. Leading by 10 strokes? Doesn't matter. On the verge of missing the cut? Doesn't matter. Bad weather? Doesn't matter. Meaningless tournament? Doesn't matter. He keeps his eye on the prize, and his mind on the means to get him there. 

Likewise, Spicy Pickle has stayed on the same path of progress they started on in the latter part of last year. And that couldn't have been easy to do. The market has been falling apart at the seams, we're in a recession (by my judgment), and we're truly toying with a bear market. Yet, we keep hearing announcement after announcement about new Spicy Pickle franchisees joining the team, and new location leases being signed. 

Why do you think that is? 

Today's news isn't likely to shock any of you at this point. Five new storefront leases have been signed. Three of them are going to the first Spicy Pickles in their state, while the other two will be one of the first few in their area. 

Congratulations Brooklyn, Edmond, and Ocala residents. Your cities are going to play host to the first Spicy Pickles in New York, Oklahoma, and Florida (respectively). They should be operational by early summer. 

Congrats also go out to San Diego, California as well as Austin, Texas. You're now slated to get your second and third restaurants (again, respectively). I don't think either location has the most-recently leased stores up and running yet, but there's no need to delay progress. Look for their grand openings in late spring. 

As far as the stock is concerned, it's tough to complain. SPKL is basically where it was in early November. Sure it'd be nice to have a double between then and now. However, considering the market is more than 8% lower for the same timeframe, I'm pleased with the relative strength. 

Chart-wise we now have a pretty clear horizontal support line right around $1.12. We've pulled back to there (or near there) four times now over the last three months - with the fourth one being today. All four times the buyers have stepped up to the plate. As long as shares can hold that line I'll be satisfied. It's all about staying in the hunt during a tough environment, so you can pounce when the environment turns more productive. 
 

	And Another Thing...

I don't know how many of you do it, but I think everybody should. What I'm talking about is paying attention to sectors and industries. 

When I first read about Bill O'Neil's CANSLIM methodology, I confess I blew it off. A couple of years later - for whatever reason - I started to incorporate the clues found in new (and old) sector/industry leadership. I swear it's made a very big difference in my results. 

Care to know which two areas are the only ones with decent results over the last 52 weeks? I don't think it's a coincidence they're also the leaders (by far) for the last month. The two groups are energy, and basic materials. I doubt anybody is surprised. More importantly, based on their current relative strength (coupled with the economic environment we're in) I think those two sectors may offer a little more opportunity than others in the coming months. 

Energy: Even though oil eased off its all-time high close above $100, the crunch is still on. I like the drillers and service/equipment areas a little better than the refiners. However, there's a lot of overlap there. 

Simultaneously, it seems like alternative energy stocks come back into focus whenever oil prices spike. Solar power stocks saw a huge run-up late last year, and are getting pushed into the spotlight again now that there's some pain at the gas pump. One of these days I think these stocks are going to come into focus and stay there. That was one of my market predictions for the year, and I'm sticking to my story. 

Basic Materials: Some of the strength here can be attributed to inflation. The Fed is somewhat locked into low rates as they try and stave off a recession (good luck to 'em), which unchains inflationary pressures. That's not a problem that's gonna' fix itself in just a few days. 

Gold, platinum, and other precious metals are through the roof - all interesting ideas in my opinion. However, one of the more obscure areas I'm looking at is chemicals. Believe it or not, they're actually leading the basic materials charge (subtracting the non-precious-metal stocks). I think they may have more longevity - and less volatility - than gold or platinum. 

No specific ideas here - just a little encouragement to think 'bigger picture' about basic materials, energy, solar power, and chemicals. 

Anyway, here's the Spicy Pickle news release. 
 

We Value Your Feedback

Got comments, questions or suggestions? Send 'em on over: Email the Editor If you wish to send a written request or inquiry, please send it to our physical address: TGR Group, LLC 4653 Carmel Mtn Rd Suite 308 #402 San Diego, CA 92130

Subscribe

Note: Your email address will be kept strictly confidential, and will not be shared with any other entity for any purpose at any time. If you no longer wish to receive the Small Cap Network Newsletter, simply follow the instructions located at the bottom of every Small Cap Network Newsletter Edition.

Refer A Friend

Ensure Newsletter Delivery

Click Here or go to http://www.smallcapnetwork.com/compensation_disclosure/ to view our compensation on every company we have ever covered, or visit the following web address: http://www.smallcapnetwork.com/profile_disclosure/ for our full profiles and http://www.smallcapnetwork.com/alert_disclosure/ for Trading Alerts. 

Larry Isen, the editor and publisher of the OTC Journal, through various entities he controls, has purchased 1,200,441 shares of Spicy Pickle at an average cost of $.2125 per share. These purchases were made in Spicy Pickle private offerings. The aforementioned purchases were made between August of 2005 and August of 2006. On 12/15/07, on entity controlled by Larry Isen participated in an additional financing wherein 12 shares of convertible preferred, converting at $.85 into 120,000 shares and 90,000 warrants with an exercise price of $1.60 were purchased. In addition, Larry Isen has received 785,000 shares of Spicy Pickle common stock for consulting services. In addition, MarketByte LLC, an entity controlled by Larry Isen, has received a fee of $30,000 cash, and 300,000 newly issued restricted shares for coverage of Spicy Pickle. TGR Group LLC, the publisher of the Small Cap Network, has received $30,000 and 300,000 newly issued restricted shares for coverage of Spicy Pickle. Mr. Isen is an affiliate of TGR Group. In addition, two other individuals affiliated with TGR Group have purchased a total of 300,000 shares at $.25 per share and received an additional 70,000 for consulting services. Current positions of the aforementioned can be found at www.otcjournal.com and www.smallcapnetwork.com in the Spicy Pickle information section. 

From time to time TGR sells shares received as compensation for coverage of client companies. Shares received are sold in the open market. Since the shares are received as compensation for services as previously disclosed, and not for investment purposes, TGR does not view the sale of the shares as contradictory to any opinions delivered in the content. This should be viewed as a conflict of interest by shareholders or prospective shareholders of the client companies. 

TGR, its Members and Members' families, are forbidden by company policy to own, buy, sell or otherwise trade stock for their own benefit in the companies who appear in the publication unless specifically disclosed. 

All statements and expressions are the sole opinions of TGR and are subject to change without notice. A profile, description, or other mention of a company within SCN is neither an offer nor solicitation to buy or sell any securities mentioned. While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein. 

The profiles, critiques, and other editorial content of SCN may contain statements that appear foward relating to the expected capabilities of the companies mentioned herein. 

THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK. THE INFORMATION FOUND IN THIS PROFILE IS PROTECTED BY THE COPYRIGHT LAWS OF THE UNITED STATES AND MAY NOT BE COPIED, OR REPRODUCED IN ANY WAY WITHOUT THE EXPRESSED, WRITTEN CONSENT OF TGR. 

We encourage our readers to invest carefully and read the investor information available at the web sites of the Securities and Exchange Commission ("SEC") at http://www.sec.gov and/or the National Association of Securities Dealers ("NASD") at http://www.nasd.com. We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at http://www.sec.gov/consumer/cyberfr.htm. Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.