Small Cap Network Blog

I trust you caught this morning’s newsletter edition, which specifically talked about Bio-Matrix, China Energy Recovery, and Spicy Pickle. All three had posted some good news, and all three stocks had a chance at a breakout. My strategy was a ‘wait and see’ approach though. (If you missed those comments, you can read this morning’s update by clicking here.)

Well, I’d be kidding myself if I said I wasn’t a little surprised that Bio-Matrix (BMSN) ended up being the biggest beneficiary today. The news didn’t illustrate any kind of immediate and tangible impact, yet shares are up 71% today. Volume is a little light, but still…

I don’t know where this will go, but my curiosity has really been spurred as a result. Follow through is the key from here, so the next few days will mean quite a bit in deciding if BMSN’s trade-worthy or not.

On the other hand, the move from a high above $1.20 to a low of $0.20 clearly was an overblown devaluation. At the current price of 60 cents, the market cap is still only about $14 million. That’s roughly the kinds of dollars we were expecting for revenue in their first twelve months of operation. Maybe the news was convincing that they’d actually become operational soon. Makes a little speculative sense.

As for Spicy Pickle (SPKL), this is the one I was surprised didn’t take off. The acquisition was accretive immediately, and it will have a very real benefit to the top and bottom line. You could cry ‘dilution’, but the upside far outweighs the downside.

I think 46 cents is the line in the sand. Shares have bumped into that ceiling - or close to it - several times during the consolidation phase over the last three weeks. If it can break out of that range (40 cents to 46 cents), we may finally get some much-deserved movement. That’s why I wanted you to put it on your watchlist.

And China Energy Recovery (CGYV)? What can I say that’s not obvious? This is by far one of the best fundamental stories we’ve covered in a long time. However, somebody has been trying hard to get out of a major position.

I’m personally surprised they don’t want to hold onto it - the stock is undervalued by most anybody’s standard. But, not everybody who owns a stock (no matter how brilliant they’re supposed to be) can see the big picture. I think these sellers will be kicking themselves in about six months, even if all of us want to kick ourselves in the meantime.

With that being said, it looks like all that selling volume is starting to dry up; hopefully the big seller is out of the way. I can still see this stock taking off in a flash. Like I said earlier today though, timing is everything. I’m keeping tabs on the chart for the right time….which clearly isn’t today.

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