Today's Busiest Penny Stocks - ACLS, KFN, LFBG, NXHD, EXPU

There are plenty of penny stocks trading on higher volume, and there are plenty of penny stocks garnering a lot of attention from the investment community. There are very few, however, that are actually doing both.

So why are we so interested in this rare group? Because those stocks are likely to be a speculator's best trading bets for the near future.

Let's take a look at what all the fuss is about with Axcelis Technologies Inc. (ACLS), KKR Financial Holdings LLC (KFN), Left Behind Games Inc. (LFBG.OB), Nexia Holdings Inc. (NXHD.PK), and Expert Group, Inc. (EXPU.PK).

Axcelis Technologies Inc. (ACLS)

The chart of this semiconductor equipment penny stock may not be much to look at from one day to the next, but if you take a step back, you'll find an erratic winner with some compelling accumulation days. ACLS is up 166% from March's lows, despite this week's weakness.

As for why Axcelis has received so much attention lately, it's got a lot (almost all?) to do with their partnership with Applied Materials. A little further down the 'reason' scale is speculation of an outright buyout, though not necessarily from AMAT. I've found very little plausible info on a buyout, however.

Though I wouldn't count on a buyout, I would play the ebbs and flows, buying on the dips and selling at the peaks (see the frame, in blue). It's artificially generated, mostly, but it's good trading all the same. The AMAT partnership just means the bias is bullish, IMO.

Frankly, a buyout would be the best thing in the long run, as earnings are not anticipated anytime soon. That's an investment reality though.... not a trading concern.

KKR Financial Holdings LLC (KFN)

This private equity fund - like most - has been struggling to find a footing. The latest evidence to that end is the company's indecision over whether or not to buy all of its European private equity fund (KPE), delist it from the Euronext exchange, and then reissue its own shares as a combined company on the NYSE...where KFN is already listed. The secondary possibility is an acquisition without relisting a combined KKR stock on the NYSE.

Don't let the shell game distract you though - I think  big part of the reason KKR wants to take KPE off the table is simply that private equity deals are few and far between, making private equity trusts fairly ugly investments... at least for now.

How ugly? KKR Financial lost $1.2 billion last quarter. The recent conversion of $3 million worth of debt to stock doesn't help the cause either.

Or, if you're a little more straight-forward in your thinking, I don't like the stock 'cause it's falling.

I'm just still trying to figure out how KKR showed up on my volume/chatter leader board.

Left Behind Games Inc. (LFBG.OB)

Shares of LFBG surged on Friday after Wal-Mart agreed to test-market some of the company's video games.
Given the giant retailer's clout, I'd say LFBG's move from $0.013 to $0.10 was quite justified... at least from a speculator's perspective. Now, there's no telling if or when Wal-Mart will pick up Left Behind's entire line and carry them in all their stores, but if they do, then wow.

Just for perspective, Left Behind Games did $232K in revenue over the prior twelve months. Wal-Mart's presence could make that dollar amount look like peanuts for Left Behind.

And, despite the big rally from LFBG recently, the market cap is still a paltry $18 million.

Translation? It's possibly undervalued.

It's still a risky penny stock, but this is one I think is actually worth a little due diligence despite the recent run up.

Nexia Holdings Inc. (NXHD.PK)

Volume exploded last Tuesday, as the stock shot up from $0.0001 to $0.0002 (a double, technically). The interest started to fade immediately though, as did the penny stock's price... it's now back to $0.0001.

So what was last week's buying prompt? The surge came right in front of an announcement that May's salon revenue had reached record levels....$164K, up 10% from a year earlier.

A reason to buy? Ehhhh, not really, but whatever.

The company also owns a couple of retail shops as well as some real estate. However, the retail side of the business just entered into a merchandise liquidation agreement - not exactly encouraging.

Frankly, the recent acquisition of $1 million worth of shares of RoboServer Systems (RBSY) - which was touted as a positive thing for Nexia in a PR - I think is a step in the wrong direction. Now a big part of the company's fate is completely in someone else's hands, which defeats the whole point of managing your own business.

This one just leaves a bad taste in my mouth, so to speak... too much hype (though they are a fully reporting pink sheet company).

Expert Group, Inc. (EXPU.PK)

Volume surged on Friday thanks to 'shareholder update' letter telling them the authorized number of shares is going to shrink to 100 million, even though the current float is only about 10 million. That's decent news, though in the near-term, a little irrelevant.

The company is a financial service company, mostly focusing on loan origination. Expert Group has also been on a recruiting tear, which explains all the strong news of late. On the surface, that success would seem attractive to new investors. I see two problems though....

First, the stock's not responding to the news. Volume has picked up, which is good, but shares have only bounced around between 4 cents and 12 cents since the PR campaign kicked in.

Second, this is a non-reporting pink sheet company, which is a little surprising considering their field. It's not like they're a brokerage or insurance firm, but given the market's skeptical eye towards all-things-financial right now, that could be a real deterrent.

My take? Steer clear...all the recent buying isn't making a dent.

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