Well, it’s been two full trading days since I highlighted three of our bulletin board stocks. My general theme on Tuesday morning was simply that the pullbacks for all three didn’t really worry me, provided they started to rebound soon. So far, all three picks have behaved satisfactorily. None have been ‘like gangbusters’, but then again we’re not in a gangbuster kind of environment.

So what type of market environment are we in? Here’s my latest take - I’m not overwhelmed by Wednesday’s bullishness.

Let’s just mix things up a bit today and look at the Russell 3000 (though each chart is telling the same story). Basically, the market is hovering just under a ceiling, but so far has been unable to break though. To its credit, last week’s rally and this week’s persistence has gotten very close to carrying stocks past early-February’s peak. But, horseshoes and hand grenades, you know?

For the Russell 3000, the line in the sand is 808. Though the Dow and the NASDAQ are technically above their February peak levels, it’s been far from a convincing move. So from my point of view, the overall market is still in a trading range.

Here’s the Russell 3000 chart.

Now, about those three bulletin board picks….

Spicy Pickle (SPKL) quelled the selling pretty quickly Tuesday morning. I mentioned those sellers were limited in number (as indicated by weak volume), and based on the way they’re not putting up a fight now, I think they have been flushed out. The buy-in volume has been a little less impressive than I’d like to see, but we’re getting decent action on the stock.

When I mentioned Smart Energy Solutions’ (SMGY) stock had found a floor at 17 cents, I think maybe somebody took that as a dare. SMGY tagged 16 cents on Wednesday. No big deal - we saw an immediate rebound. It’s just one of those things where ‘as sure as you say it….’

Anyway, I want to reiterate the message I was sending then - though the stock is not doing great, it’s not like there are armies of sellers. In fact, there are decidedly more buyers, need on the rising accumulation line. It’s just that the buyers can’t string enough decent days together in a row to break out of the funk. It’s definitely becoming a test in patience.

And then there was SpongeTech (SPNG). The issue here wasn’t a lack of strength, but too much strength to sustain. The stock did indeed pull back even further on Tuesday, hitting a low of 3 cents. On Wednesday, we saw nice, reassuring rebound, with SPNG again hitting a low of 3 cents and pushing off of it to end the day at 3.6 cents. That’s not the biggest deal though.

Take a look at the last two bars (Tuesday and Wednesday). They’re almost mirror images of each other, and both are relative tall bars (wide ranges). Though it’s not technically what’s known a ‘bullish engulfing’ pattern, it comes pretty close. We need to see a little more upside on Thursday to clinch the signal. It’s encouraging though.

Anyway, all this bodes well for all three bulletin board stocks. Is the market giving ‘em a little nudge? Sure, but we’ll take it.

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Chalk up another nice win for small cap company Smart Energy Solutions (SMGY). The latest victory was announced this morning…they’re partnering up with Kerr Industries - one of General Motors’ (GM) key upfitters for their police and emergency vehicle lines. Smart Energy’s Battery Brain ™ will be offered through Kerr’s catalog as one of the options for a first-response vehicle ordered through the GM/Kerr program.

The opportunity here is decent; General Motors sells about 20,000 emergency vehicles each year. For comparison, Smart Energy is selling Battery Brains at a rate of about 7000 per month. So, even a large number of installations won’t be a windfall. On the other hand, bear in mind that GM is hardly the only company that sells police cruisers and other emergency vehicles. In fact, Smart Energy already has a deal with another first-response vehicle equipment supplier - Lund Industries. They struck a deal with Lund back in November.

The ‘take away’ here isn’t just the Kerr news…at least not to us. No, the thing to keep in mind about this announcement is that we keep hearing the same kinds of announcements from Smart Energy Solutions. We’re getting them at a rate of about one per month.

More importantly, each new outlet is making a dent in the top and bottom line. They’re now selling the device at a rate of about 7000 per month, as mentioned above. That’s much stronger than the pace from a year ago, which was stronger than the pace a year before that. The incremental gains have become reliable, so we’ll be patient here.

By the way, we count a total of 15 new partnerships and/or distributors in just the last year. That explains much of the top line growth so far. But more importantly, it also leaves plenty more opportunity for other new partnerships over the next couple of years.

Here’s the news.

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Well, they’ve gone and done it again. Small cap company Smart Energy Solutions (SMGY) has found another partner to help distribute their Battery Brain product, incrementally adding the number of units they’re likely to sell on a ‘per month’ basis. Back to that in a second; first a look at the details of the news for owners of this small cap stock pick.

Actually, it’s not quite accurate to say they found a new front-man for the Battery Brain. It’s the same device, but it’s going to be sold by OnGuard Dealer Services as a private label item. That’s not the big deal though…Smart Energy sells a lot of the device under someone else’s brand name. Take Honeywell (HON) for instance - well, actually their subsidiary Autolite. Autolite sells the battery-saving hardware under their own brand name. Smart Energy still scores some nice wholesale revenue from the effort though.

No, the big deal here is OnGuard’s market - car dealers. We’ve seen Smart Energy tap into this market slightly, when they announced a Macon, Georgia Kia dealer was going to start offering the ‘Reserve Power Module’ (which is just a Battery Brain for dealers) on its cars. That was just one dealer though. Today’s news opens up a relative universe of new and used car dealers. The scope of the potential is the exciting part.

Per the press release, 40 million used cars are sold every year in the United States - a number I was surprised by. There are also about 16 million new cars sold every year in the United States - a hefty number I already knew of. That’s about 56 million potential ‘customers’ for Smart Energy each and every year.

Will OnGuard be able to get a new ‘Brain’ on the car involved in each of those transactions? Of course not, but given enough time they should be able to get a solid number into some of them. Let’s just think ultra-conservatively though, and say they achieve a 1% penetration - that’s 560,000 units.

For reference, Smart Energy has sold about 180,000 so far, so this is obviously a nice win for the company. (It’s also worth noting Smart Energy is building armies overseas as well, so the number of ‘customers’ isn’t limited to the United States’ numbers.)

I’ve been using an estimated wholesale price of $25 for Battery Brains. That’s probably not exactly right, but my goal is to provide scope - not an accounting statement. At that price, a 1% penetration would translate into sales around $14 million. And frankly, 1% seems on the low side to me. Only time will really tell though.

Anyway, I want to stress again the pace of sell-through the company has been creating of late…about 7000 units per month. Annualized, that’s about 84,000 per year. Folks, as of January of this year they had only sold about 180,000 (total) since March of 2005. The pace is quickening….a lot. That shouldn’t be a surprise though - they seem to add a new dealer, outlet, or representative about once per month.

I know I’ve been singing their praises here, even as the stock was falling (a fairly unpopular decision). I hope it wasn’t misinterpreted as an all-out ‘buy’ opinion. My point was just that the company was doing its part, even if the stock wasn’t responding. It happens.

Eventually I feel the stock will be priced right. And truthfully, I don’t think SMGY is necessarily priced ‘wrong’ at the current level of 22 cents….based on current results. The thing is, current results are on track to be topped in the foreseeable future. I’ll let the chart tell me when the best time to buy may be. A couple of weeks ago I thought it could have been now, though I don’t feel the same at this point. Like I said though, eventually the company’s progress will be reflected in the stock’s price.

Here’s the news release.

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Looks like I’m on something of a roll here….I called for a pullback yesterday morning, and got it yesterday afternoon. The NASDAQ was off 2.2%, the S&P fell 0.3%, and the Dow sank 0.6%. I still think there’s a little more selling needed to shake-off the recent exuberance, and getting to the end of the week today is likely to be all the excuse the market needs to drive ‘em down one last time. The fact that we’re starting the day out above yesterday’s close just makes it that much more likely.

After that - a.k.a. next week - I’m looking for more bullishness. We still have a bigger oversold situation to burn off, which was jump-started by the mini-capitulation signaled by too many new lows on the 17th. So, don’t sweat the weakness too much.

By the way, I had an ‘aha’ moment after I submitted yesterday’s morning call. An easier way of saying what I meant would have (basically) been ‘bet against the open’.

Ingles Market (IMKTA) is strong, AmeriCredit (ACF) was weak, and railroads….well, 2 out of 3 ain’t bad. It’s only been two days though - you think I should work on patience?

Anyway, for those of you who’ve been around a few months, Smart Energy Solutions (SMGY) has taken another big step towards their end goal. Click here for the detailed comments; here’s the teaser….they have another dealer, but this one has access to largely a new audience.

Chew on this…imagine 21,200 potential ‘retail stores’ all suddenly selling your product. Now imagine more than 40 million potential new ‘customers’ created every year. If you’ve only sold a few hundred thousand pieces of your product to date, it’s exciting news, right?

I’m telling you people, I think Smart Energy is one of those companies that’s gonna’ quietly work they’re way into success, and then be ‘found’ overnight by the market. Maybe it will be tomorrow, next month, or next year. Sometime though. The hare may be sexy, but don’t forget the tortoise won the race.

Regardless, click here for the full scoop.

Pick of the Day: Bio-Matrix (BMSN). Come on - you didn’t expect is to say anything else after yesterday’s profile, did you?

By the way, check out another of our recent picks…Tenet Healthcare (THC). Not bad…for those who got in and stayed in. The chart looks a little cup-and-handle-esque, which may turn good news into great news here. The trade is up about 30% from our pick price, but the slingshot effect of a good cup and handle pattern could swell that number up pretty nicely.

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Some of you may have already seen this, but I’m going to guess most of you have not yet reviewed - or even heard about - Smart Energy Solutions’ (SMGY) newest investor presentation. If you haven’t yet, you may want to take a look…it offers up some hope for a company I’d pretty much given up on.

I stumbled across it a few days ago, only because I keep tabs on anything any of our companies files with the SEC. That, however, was the odd part. Anybody can put together a PowerPoint about their company; not everybody submits it as a document to the Securities Exchange Commission. There was no fanfare or press release to go with it…just the notification of a document - a PowerPoint - being filed.

Now, it’s not one of the official documents (such as a 10Q or 10K, ‘S’ paperwork, or any insider ownership information) the Securities Exchange Commission requires, nor is the information found in the document a guarantee of any sort. The fact that it’s been voluntarily filed with regulators though….well, that carries some weight with me. Maybe there’s a reason to stay interested after all.

You can actually take a look at the document from the Smart Energy website by clicking here. You’ll need PowerPoint (or at least a PowerPoint viewer) to do so. It’s probably the best summary I’ve seen for the company and the underlying opportunity. What I really want you to notice is on page 12 - the revenue forecast. That’s largely why SMGY is still alive on our site.

That said, it’s not a reason to go out and load up the truck with SMGY shares. This stock has been getting beaten up for a while, and I’m not a big fan of trying to catch falling knives. In this case though, I’m willing to at least consider picking the knife up once it hits the ground.

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Smart Energy Solutions has been ‘fishing’ for a little over a year now, and they’ve really started to catch some pretty nice ones too.  For perspective, in 2006, revenues of $1.8 million easily topped 2005’s total of $151K. As nice as those bigger fish were though, I have to say I think the company just landed the proverbial ‘whale’. This morning we learned a multi-million dollar deal has been forged.

I’m not going to review the entire Smart Energy Solutions (SMGY) story again, as most all of you know it by now. I’ll just summarize it with this - Smarty Energy’s ‘Battery Brain’ can drive revenue in three ways…(1) retail, (2) wholesale , and (3) as a private-label product.

To date it seems like most of their business has been as a wholesaler. Today’s private-label agreement, however, may have trumped all of their combined business so far.

Though there weren’t many details added to the news release, a couple of different times they specifically mentioned a couple of words I really like to hear when it comes to young companies…multi-million.

All-Start Battery will now be selling Smart Energy’s auto battery-saving device (otherwise known as a Battery Brain) as their own product, called the StarterGuard Failsafe Battery System.

They can call it whatever they want for all I care - it’s their private-label program to do with what they see best. The only thing I’m concerned about is that Smart Energy is getting paid, and apparently getting paid well.

They didn’t divulge the details, but they did mention a couple of times it was a long-term, multi-million dollar deal. That can mean a lot of things, but at a bare minimum I have to assume ‘multi’ means at least $2 million. And frankly, I personally believe it means much more than that.

Regardless of how much ‘multi’ is in this case, it’s got to be big on a relative basis. The company did $1.8 million in 2006, and has done $1.1 million in business for the first three quarters of 2007.  No matter what, we’re talking about a very substantial increase in sales. Better yet, the orders are in hand, and shipment will be immediate. And, those first All-Start sales can be booked in Q4 of this year.

More than that though, I think this news is an important assurance for investors that the product is plenty marketable.

We all know it’s felt like a slow start for Battery Brain revenues, but that’s just the nature of the sales cycle in the automotive supplier world - it can take months from the first contact to produce tangible results. Once you book one good one though, all of a sudden it was worth the wait.

Though I don’t know of any impending deals ready to roll, I do know that we’re now several months into the first major wave of the sales process. I have to think the All-Start news is just the beginning.

Is this going to be a spark of new life for the stock? I think it could be.

The press release is here.

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I’m not sure if everybody saw it or not, but if not, small cap company Smart Energy Solutions (SMGY) posted their Q3 earnings this week. There were no surprises…about $260K in revenue, and $145K in cost of goods sold. The total net loss was $1.7 million, thanks to some big publicity/consulting fees. The total operating expense for their third quarter was $1.6 million - roughly the same amount as the loss, though much of that was paid with stocks and/or warrants.

The top line and profit margins continue to come in about the same from quarter to quarter. The problem is, operating expenses are also coming in about the same from quarter to quarter. I don’t think there’s anything wrong with the gross margin, so I think they really need to boost the top line to make this thing work.

I do think they can, and eventually will, improve revenue. I just don’t know how long it’s going to take. I estimate they’ll need to multiply sales by a factor of about twelve to reach a break-even point if they can’t pare down expenses. To go from $1/4 of a million to $3 million per quarter? The dollar amount isn’t much for the multi-billion dollar automotice aftermarket arena.

I’ll say this much….they spent a lot on the Carter deal and publicity efforts last quarter, which isn’t bearing fruit yet. When that goes through, these numbers will change. Also, I know they’re working on an overhaul of their marketing/sales process. The company said they anticipate better numbers for the current quarter. 

Another observation…though the stock has moved lower of late, we’re still seeing more accumulation than distribution (i.e. more buying than selling). I’m willing to give them the benefit of the doubt for now, though I’d obviously prefer the stock to start moving higher now that most of the worst is over.

For the complete quarterly update, click here.

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Micro cap company Smart Energy Solutions’ (SMGY) reach now extends south of the Texas border and into Mexico. On Monday afternoon, the company announced they’ve signed a distribution agreement with Ameesa - a provider of several imported automotive items in the region.

Some Battery Brains have already been delivered to Mexico, with additional orders still in processing. The deal with Ameesa, though, is expected to accelerate the device’s popularity in the regional market. The distributor is already a major supplier to both public and private customers, and being affiliated with them should gain solid attention for Smart Energy’s technology.

For more on the news, click here.

I have to give credit where it’s due - Smart Energy Solutions Inc. (OTCBB: SMGY) does a great job at maintaining share value through a strong public presence effort. That in itself tells me a lot about the quality of the stock. Why? A lot of companies assume stock prices are always fair, even when they’re not. Smart Energy doesn’t make that assumption, and shareholders benefit because of it.

However, that’s all academic. I just wanted to point out my observation before I illustrated it with an example.

On August 20th and 21st, Smart Energy will be participating in the Noble Financial Equity Conference, which is specifically geared to provide small cap companies an audience to efficiently share their opportunity with other interested parties.

They’ll also be making a presentation at the conference. The nice part for you is, you can watch the presentation from the comfort of your own home. The presentation - with streaming video and PowerPoint presentation - will be webcast live and archived on the websites of Smart Energy (http://www.smgy.net/), and Noble Financial’s conference website at www.two-007.net. It is recommended that interested parties register at least 15 minutes prior to the start of the presentation to ensure timely access.

To learn more about the conference, just click here.

By the way, Smart Energy’s quarterly results are out. They were fairly uneventful….close to flat. That’s not to imply they weren’t important - results are always important. But, I think Smart Energy’s story is more one of where they’re going to be 3 to 6 months from now rather than where they were 3 to 6 months ago. To read the numbers for yourself, here’s the 10Q.

To be perfectly blunt, I think now’s the time to take action. We’ve seen Smart Energy Solutions’ (OTCBB: SMGY) chart dropping pretty strong hints of a bullish move being in the works, but today’s move is the biggest yet.

Right out of the gate this morning we saw a big purchase - 70,000 shares were bought in the first minute of trading, and a 2 to 4 cent premium over Friday’s closing price was paid for every one of them.

More than that, Monday’s high of 61 cents (so far) challenged the highs we’ve seen since March (save one low-volume blip at 62 cents on May 4th). Yet, there’s no news…at least no tyet. That’s the point though….something good is probably going on, as all these higher highs and higher lows have alluded to.

Just a hair higher (at or above 62 cents), and I believe a lot of short-covering or buy-in stops are going to be triggered, and we’ll see the upside flood gates finally opened. As I mentioned a few times about SMGY already, I don’t want to have to chase it when and if that happens.

In the meantime, and regardless of the new high possibility, we’ve seen enough upward momentum to pull SMGY above its key moving average lines. In fact, the short-term lines have crossed back above the longer-term ones, creating what some traders consider official ‘buy’ signals.

Either way, I like how this is shaping up - I think I smell a rally brewing.

Well, it was the first day back from Smart Energy Solutions’ (OTCBB: SMGY) possible ‘wash & rinse’ day, where all the sellers get flushed out, leaving only the buyers behind. If I were giving the bulls a grade on their results, I’d probably give them a B+. I’d be willing to change it to an A- if they corrected their test.

Goofy analogies aside, I really did like the follow-up on yesterday’s deep plunge and late-day rebound. Today (Tuesday), SMGY gained 3 cents, or 5.45%, to end the session at 58 cents. It was another wide-range day, but the high and the low were much better.

I think more importantly, we saw big volume….volume bigger than Monday’s. That technically qualifies as ‘accumulation’.

Like I said in Monday evening’s edition, the key to any rebound would be in how (or if) the stock came out fighting the next day. Though there are still some things I’d like to see happen on this chart, I confess - I’m getting very enthusiastic here. I think we may be seeing a light at the end of the tunnel.

From here I’d still like to see a close above recent highs around 62 cents. This would - by default - carry shares above the 100 day moving average (which has recently popped up as a resistance level). Overall though, I think this is a good first-day-back from a big doji bar.

Q: I read the investment data on the Battery Brain and find it to be quite interesting. However, I believe most battery failures are caused by internal shorting of two or more plates, thereby preventing sufficient starting current to flow to the starter motor. How would that situation be remedied by the Batter Brain? Thanks in advance for your response.

A: The chemistry of Battery failure can be caused by many issues . The life of a battery is shortened every time the battery is allowed to be drained below the safe level and the Battery Brain will disconnect before your vehicle get to that level.

With age the battery will hold less of a charge and prior to the Battery failing you will be alerted by the Battery Brain disconnecting every morning because minor electrical draws from your clock , radio or computer will bring the battery to the disconnect point. This is your warning that the chemistry of the battery is at a point where it should be replaced.

Call it a delayed reaction if you want, but it looks like our Smart Energy Solutions (OTCBB: SMGY) idea may finally be getting some traction. We first published on SMGY on May 30th, and then again on June 11th, as there was big news both days. Though we saw plenty of volume each time, we’re just now starting to see the stock move. Oh well…better now than never.

So far we’ve hit 60 cents - the high point for over a month. And, volume is outstanding. In fact, we may be on track for a record volume day (though that would be an enormous feat). Even if we don’t break a volume record however, it’s good to see this company’s story is finally starting to get some attention.

So, here’s what I’m thinking….I hope everybody who wanted in is already in. The move to 60 cents means any of our readers are already up on their trade. A move to 61 cents would match the most frequent ceiling we’ve seen since April. A move to 62 cents would match a three-month high. I believe anything past 62 cents could constitute a breakout, and then we may really start to see SMGY move.

So why now? A couple of possibilities, I’m guessing. First, I’m wondering if today is the first day of the dynamic change, where the large cap luster starts to fade and small caps begin to draw a crowd. Second - and probably more likely - I wonder if a big fund or money manager has finally made a decision on the opportunity. That was a something I mentioned both times we’ve published on Smart Energy so far….it was an easy-to-understand idea, and the numbers looked good. After doing a little due diligence, a big player may finally be accumulating.

Either way, the action today is encouraging.