It seems about the only thing wrong with Spectrum is it’s share price. Followers have noticed several good acquisitions, a really clean balance sheet with about 40 cents a share in cash and no debt and today, an announcement that it had acquired a way cool C$8 million ($6.2 million) mining services contract through subsidiary M&M Engineering. Here’s the chart:

SPSC looks to be forming a base and reversal in direction as shown by the continued daily break and closes back above our preferred displaced 3×3 moving average– which tends to be a better lagging indicator than the simple moving average of 50 or 200 days used by most traders and investors. If I’m correct in my assessment here, the stock should try and clear out the 1.72 level and, with enough momentum, 1.96 would be the next point of resistance.

And the company has a good shot at doing $100 million-plus in revenue next year. It did $11 million last year and has a market cap just south of $60 million.

Thoughts, reasons for the share price?

The other stock that confounds is Isonics. Take a look at this nifty chart:

Isonics appears to have settled down its selling pattern and has recently made a nice move up, if the stock can continue its momentum to the upside, current levels provide a nice buy side entry with a target of 3.98 before it may want to pullback again. Could be a quick 20 percent if the mo-mo continues.

This stock has replaced Spectrum as our volatility leader. Trade the swings. The company came out today with a meaty release detailing its strategic plans for the foreseeable future including integration of Protection Plus Security Consultants to add to its Homeland Security unit–including around $13 million in revenues. Isonics trades like a banshee and while a long-term position likely makes sense, it’s also a trader.

I have to admit, I was sort of wrong about Google. Damn stock’s up to $255 and I’ll still don’t see it. Analysts are now looking for $350 afdter lookiong for $250, $275, $300 etc. Still, as a smallcapper, there’s no leverage unless you have cash to burn, so let’s go with I still don’t like it.

All of our other traps including Apple, Martha Stewart etc, still haven’t returned to nearly where they were when we first checked in.

Market looks healthy for a decent summer rally, so have at least a selection of favs–either ours or yours. Keep some cash on hand, always. There’s always something coming along.

Comments have slowed a bit, although visits haven’t. Send ‘em in. Now.

Trade Safely.

Did a piece on Eden Energy yesterday. The bottom line is that I don’t believe all the pundits’ palaver about having enough oil to meet demand. We need large discoveries. Eden may well fit that bill for those who like the action of a potential elephant finder. Evidence as to the potential of Eden’s Noah property in Nevada is mounting as others around it find oil. Suspect as other finds leak out, the shares will move before the drilling starts, likely in the fall. here’s the piece…

The biotech sector is on its butt, apparently. our selections, including Biocurex, MIV Therapeutics, Biophan are idling and have all declined slightly. Smells like an opportunity for me as a set-up to a summer or fall rally. Patience and buying on dips is likely the best strategy. All appear to have good moves in them. Timing, as usual is the culprit. I’d consider picking away at all or some, depending on which catches your fancy.

Isonics continues to be volatile. The shares moved lower as we felt since the techs looked weak. Then they popped up again to the $3.30 level which seems to be a stall point. Keep a core holding, but trade the swings.

Micromuse looking perky as the shares moved nicely this am to $6.40 on no news. It’s up about $1. since we alerted the Smallcap readership in February. More to come on this one, it seems. Nice cash, no debt. Some analyst upgrades helped. I only like analysts who come in after we’ve found a stock.Business good, revenues up, 6 million share buyback program. What’s not to like?

Bottomline Tech looking perky as it powers through our $13 resistance. We brought it to you late 2004 at around $10.50. For those nervous the $13 won’t hold, sell some, as the techs look weakish here. I think that there will be a chance to buy back lower as its trace .618 of its down move. Might stagger new purchases or replacementsn should it retrace to .382 and .618 levels. Always a good idea to lower a cost base. Again, decent cash, no debt. Looks like a winner. But a trader, for sure. here’s the chart:

Finally, Informatica still in the hunt and has popped nicely over $8. Major slug ‘o cash and again, no debt. See a trend? As I’ve said before, buy it for the biz, not for a takeout. Although no complaints if that happens. Little squib at TheStreet.com musing about Oracle’s plans to augment/add/acquire biz intelligence companies. As I said, buy INFA for the biz, not the takeout.

TTFN. Trade Safely…

Spectrum announced the closing of the Horne Engineering acquisition this am. Here are the details…

Basically, SPSC did $11 million last year and is projecting to do $100 million in revenues for 2005. Darryl Horne is taking the reins as well as other execs from Horne. Spectrum announced a 2 million share buyback in April. The company has almost $10 million in cash and no debt. Two other acquisitions will further diversify the product mix and open it up to more sectors including mining services and the oil services sector.

Here’s the chart:

Our chart shows the SPSC shares are evidencing a directional change as a result of continuous breaks above the 3×3 DMA line. Over and above the fact that the company has morphed itself into a compelling industrial concern with great growth prospects, it looks a good addition to that portion of a portfolio. A rally to $1.88 short term wouldn’t surprise me. With all the corporate activity concluded for now, a fast integration should serve the shares and revenues quickly and well. I expect that will occur. A few shares would be a reasonable punt at these depressed levels.

Trade Safely.

We mentioned Isonics a couple of posts ago as a potential trade since it had been acting so horribly. The shares were in the low $2 range and have since popped to $3.40-$3.50 on massive volumes–in the order of several million a day for the last few sessions. Here’s the chart:

While it has been a good trader there has been a dearth of substantive news. Not to say it isn’t a good company with good prospects–it is. And there may well be something positive going on, but I have no idea what it might be, if anything.

To me, on a tech level the trend indicators look negative and the recent move looks like a dead cat bounce–albeit a good one–although it has simply retraced .382 of the long selloff which started in February. I’d wait for a 50 percent pullback of the recent up move it’s made to initiate new positions. And you might want to sell a bit into this run.

As I said, there might be something going on, but since I don’t know what and the techs look weak, well, there we are.

Trade Safely.

As I mentioned a couple of blogs ago, Isonics has been a bag of hammers, but this am sold off big-time down to $1.80 and then popped to $2.20 on over 3.5 million shares by mid-morning. No news to speak of, but technically, looks like a nice capitulation. Don’t count it out yet, and you should likely have a few in the spec end of your portfolio.

The NASDAQ has also been goofy over the last while.

We got the rally we expected, so we were very right there, and it appears the comp is making a good effort to reverse its 4 month downtrend. However, we may see a better buying opportunity on a pullback of some kind and I would not chase this rally, let it come to you. If the market does decide to reverse and resume its downtrend, the next move down may be ugly. Buy the pullbacks and exercise prudent mental stops accordingly. If you’re a long term investor, I’d suggest 33% allocation to the market at current levels.

Lots of stocks idling, including Biocurex, Biophan–although a bit weaker–read buying opportunity–lately. Software Spescom , cable operator Stream and MIV Therapetics also steady but stuck in trading ranges. Better markets will fix all of those as the collective potential is compelling.

It’s May, always a tough month for stocks–big or small. Lots of opportunity to position for the fall. Prices on most have come down nicely. Could they go lower? Sure. Will they recover? I’m betting yes. If you liked them all higher, nothing much has changed so buying on these dips and more if they appear is probably right.

Patience is a virtue. Usually a profitable one.

Trade Safely.