Aug 27, 2010 10:04 AM PDT
We're going to take a fairly detailed look at Ingen Technologies, Inc. (IGNT.PK), Magnum d'Or Resources Inc. (MDOR.OB), Environmental Solutions Worldwide Inc. (ESWW.OB), Frontier Energy Corporation (FRGY.PK), and ERHC Energy Inc. (ERHE.OB).
Ingen Technologies, Inc. (IGNT.PK)This isn't our first look at Ingen. We first pointed it out on June 9th after a major breakout move (from $0.0035 to $0.0145) that was rooted in a fairly non-descript 'success story' the company had with an ad placed in a magazine. I had my doubts at the time, but figured it could be worth keeping an eye on in case the hype took hold.
It didn't.
By the time we took our second look on June 18th, IGNT had time to settle in a tight range; it closed at $0.0095 that day. Shares are at $0.0122 right now, on the heels of another round of good news...the company's nasal Cannula product is on the market as of today, and Ingen actually won a fairly prestigious award from the United States Commerce Association... the 2009 'Best Medical Device Manufacturer' award.
I still say it's more hype than results, but the hype seems to be taking hold (and the company seems to be able to create it).
Magnum d'Or Resources Inc. (MDOR.OB)Magnum has had a pretty good week so far. Prior to this week the news releases were a little fluffy; this week they have substance. On Monday, the company announced a contract that could generate between $26 to $41 million per year, and on Tuesday, and independent research firm (Cohen) established a target price of $4.34 for the penny stock. That's almost a quadruple.
Just for perspective, the market cap is around $56 million right now, and would be close to $200 million at that $4.34 target. If they want to justify a market cap of that size, they'll need more contracts than the one announced Monday. They've got the capacity to do more though.
The chart's a little squirrelly; I'd pick and choose your entries on the dips. Bigger picture, this is an interesting idea.
Environmental Solutions Worldwide Inc. (ESWW.OB)After the run from $0.10 to a peak of $0.85 (the current price is $0.72), I'm more inclined to at least take profits on the penny stock, if not short it outright.
Frankly, I'm not sure why the hype machine went into high gear for ESWW.... there hasn't been any news from the company since June 10th, and almost all the news before that was pretty meaningless. Nevertheless, here it is.
The underground buzz is that the clean engine company (diesel, gasoline, and alternative fuels) is close to launching a major railroad engine retrofit campaign. My problem is that we've been hearing about 'plans' for a while...as in years. I think the stock is poised only to disappoint from here.
Frontier Energy Corporation (FRGY.PK)The high-volume surge from $0.0005 to $0.0011 yesterday stemmed from ....well, from nothing.
Clearly somebody was buying it though.... volume topped 75 million shares on Tuesday - the biggest day ever.
The lack of follow through today isn't huge, but a 100% gain is a tough act to follow.
As it stands right now, we don't have enough bullish evidence to make a 'buy' conviction. I am curious about yesterday though... curious enough to keep this penny stock on my watchlist.
ERHC Energy Inc. (ERHE.OB)How did I miss this one from January's low? The move from $0.11 to the current price of $0.65 is a monster.
Trend wise, I have to be bullish (though prepared from choppiness). In terms of 'being realistic' though, I have to acknowledge that ERHE is overbought... and there's certainly lots of profit-taking potential.
As for what's driving the rally, it was a sense - nothing official - that drilling was close at hand. The only company-confirmation we got of that notion was the June 9th update that stated "drilling is close - possibly less than six weeks away". Whispers and rumors tend to flow before official statements do though.
My take? I've got a bad feeling we're going to see a severe case of "buy the rumor, sell the news". This penny stock is at multi-year highs, and the driller has yet to touch their first drop of oil.
Maybe the Joint Development Zone (JDZ) will be a gold mine once it's finally operational. It better be, actually.
So, here's how I would handle it....
At this point, you missed the boat - if you're not in, I don't see much need to get in now, even if oil is hit within six weeks.
Why? I foresee a pullback on the way... strictly a technical one that's got little to do with the company's success. If the JDZ really bears fruit, you can wade into ERHE on that dip. If the JDZ ends up being a bust, then you don't get in. In the interest of fairness though, I sure wouldn't short the stock unless that support line is broken.
That's just my view anyway.
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