Enigma Software (ENGM) - How To Trade A Hot Small Cap Stock
Well, here we are not too far away from seeing our small cap stock pick Enigma Software (ENGM) begin trading following our suggestion and profile launch. I suspect the collective efforts of our readers (who chose to own it) will have an evident impact on pricing. So, I think it’s important we lay out some basic defensive measures and stock trading strategies just in case ENGM gets a red hot start right out of the gate. After all, while I want ENGM to go higher, I want everyone to get good fills even more.
First, I think a buy-limit is on order, especially if we see this thing gap up in the morning. I think 24 cents may be a decent cap for starters. Where’d I get 24 cents? That was the high/peak from last month. It may not be right, but better safe than sorry. If it’s clear by later in the session that you can’t get a fill at or under 24 cents, then you can make an appropriate adjustment.
Second, maybe the right answer is to not even try and get in first thing in the morning. Let everybody else duke it out when volatility is high. Then once all the dust has settled, step in and do your thing.
In both cases, the risk you run is not getting filled at all early on, only to see Enigma shares inch higher all day long. However, I really do think that’s the lesser risk here. The bigger risk is jumping in too soon, at a not-so-great level.
As always, it’s your call. If something significant changes within the first few minutes of trading, I’ll post a another blog entry.
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OH NO! That truck I have loaded with ENGM shares is getting flat tires and parking tickets…
Do you know anyway to inflate the tires?
Editor’s response: Oh man, if I knew how to do that I’d be on some private beach somewhere enjoying being a multi-millionaire. I think ENGM is in a much bigger hole than we could have ever imagined. I also think Dutchess’ financing is largely to blame.
On the flipside, the company continues to perform (i.e. sell), and margins are still high.
I don’t think you can inflate the tires, but I also have to chalk a lot of it up to micro-cap malaise in general. They’ve all been sucking wind the last few months, and ENGM has been pushed out to sea by the tide. Let’s not throw this one out yet until we can see if it can swim when things are better. Plus, what do you have left to lose (except 3 cents)?
If - and that’s a big if - Dutchess doesn’t kill this company, I think they may have prayer…..though I certainly wouldn’t be adding any at this point.
Comment by Patrick Mowrey — 12/13/2007 @ 7:11 pm
I have been looking into investing in enigma software group and was wondering what companies with in its industry or even outside of its industry are their competitors? I want to compare them before i make a final decision.
Editor’s response: That’s the problem with the company….there’s really no comparable company. They sell computer security software, so you could make a comparison to Symantec or other anti-virus. But, they sell it all online via subscriptions. They also sell other similar things online. It’s apples to oranges (at best). Enigma really is an Enigma.
Comment by Gregory Brandt — 11/14/2007 @ 2:31 pm
I bought in at .20. Looks like this pull back to the .15 area is here to stay for a bit or what? Obviously the volume looks like poop and there hasnt been any decent PR’s since this posting but how do the charts look?
thanks
Editor’s response: Well, I’d be kidding myself if I said ENGM wasn’t a dissapointment so far. We saw one day’s worth of strength, and then a retreat. Not exactly encouraging.
I think that ENGM is just going to be a stock that doesn’t trade well. I was hoping we could improve the volume (and we did for a day), but there’s just no longevity. Honestly, I attribute that to the fact that there just aren’t many shares out there.
I do think ENGM can and will move, but now I suspect it’ll be an overnight thing…when the next batch of earnings comes out. In the meantime, there’s not much to watch. The only news the company ever puts out is an update on the number of subscriptions/renewals they processed last week. All well and good, but not necessarily exciting.
We still like it, but we don’t expect to be impressed by it on a daily basis.
Comment by carl — 10/18/2007 @ 9:31 am
now that I have a truck parked outside with ENGM shares in… what shall I do? it is a dead issue today?
I bought at .24 average yesterday
Got any clues?
Editor’s response: Yeah, not entirely surprised things were a little slow on Tuesday. Monday was the highest volume day ever for Enigma, so Tuesday was a day of rest. We may see this one stay stale for a few days…that’s just how it works when volume is thin and the market cap is nil.
In my mind, I think we need to give this one a few weeks to really get to where we think it’s going. It may be a roller coaster between now and then, but it should be mostly a good one.
Comment by Patrick Mowrey — 10/9/2007 @ 1:42 pm