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INTELLON CORPORATION & HEALTH GRADES, INC

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

Since the last Newsletter, we closed seven positions; four for gains and three for losses.

ACADIA PHARMACEUTICALS (11/20/08). Closed position 5/4/09 at $2.70 for a 87% GAIN.

INCREDIMAIL (2/20/08). Closed position 5/4/09 at $4.90 for a 53% GAIN.

O2MICRO (3/20/09). Closed position 5/1/09 at $4.42 for a 58% GAIN.

NETWORK ENGINES (6/5/04). Closed position 5/1/09 at 71 cents for a 77% LOSS.

TMNG GLOBAL (4/20/04). Closed position 5/1/09 at 38 cents for a 89% LOSS.

OPNEXT (3/5/09). Closed position 4/30/09 at $2.54 for a 50% GAIN.

REPLIDYNE (4/5/08). Closed position 4/30/09 at 66 cents for a 51% LOSS.

Acadia Pharma had sunk to a dollar and then pulled a Lazarus on news that it entered into a pact with Biovail to develop its Parkinson’s drug. Great revenue and earnings news sent IncrediMail jumping, which is what stocks are suppose to do on this sort of event, but, in this market, it has been a rarity. As we said in the last Newsletter, O2Micro had hit our 50%-plus target and that we were going to close it; the stock rocketed on pretty good earnings news. We have no clue as to what propelled Opnext to hit 50%, but we’ll take it. We, of course, closed Replidyne, since its merger was finalized a few months ago. And yes, we finally closed Network Engines and TNMG Global, our two oldest positions, for losses.

And so, the markets have kept going up, more so on perception than because of reality, thanks mostly to the Fed keeping interest rates artificially low; although there are signs that the markets may be leveling off. This, of course, has led investors into a buying panic on stocks, which they perceive as potentially having better returns than a 2% bank CD. The gist of the problem, as we have alluded over the last six to eight months, is that the government is more focused on restoring financial confidence than it is on fixing the financial system. What happened to all of the toxic assets that were such a huge concern just six weeks ago? They are still there and growing, hourly, as are credit card debts and commercial real estate defaults. So, once again, we warn you to exercise extreme caution.

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SONIC SOLUTIONS, INC. & SORL AUTO PARTS, INC.

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

For the last month, or so, the Dow has been clinging to the 8000 level and the NASDAQ at around 1650-1700. They both should have seen the start of a sell-off, by now, but haven’t, at least not yet; and we think we know why, sort of. The Fed, by pumping trillions into the system and keeping interest rates artificially low, has been forcing investors to take bigger risks in hopes of scoring bigger gains in stocks. This is borderline criminal for a number of reasons. First, it chokes people living on a fixed income. Next, it is laying the groundwork for massive inflation down the road. And, lastly, the Fed’s action is creating bogus high prices for many stocks that should not be trading at current levels, especially the financials. Our major concern is that when the money spigot stops flowing, for whatever reasons, this house of cards will fall, and will fall hard and deep.

In short, it would have been better for the markets to have had “the great washout” because it would have probably occurred by now, and true valuations would have been much clearer. As things stand, no one has a real clue as to what companies are really worth. So, be very careful. This also applies to our own picks, which are still in Death Valley; however, some have been stirring, such as many of our recommendations of the past twelve months.

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THE HACKETT GROUP, INC. & DURECT CORPORATION

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

And so, the bull rally continues, for no real reason other than great spin. We still believe that the markets will test new lows. When? Good question, although we thought we would be there by now. The one thing we do know is that bull rallies in a bear market have ended badly, and this one looks to be no exception. And no, we do not believe that this is the start of a new bull for the simple reason that nobody still has a clue as to the depth of the losses at all of the “too big to fail” financial institutions. There have been too many smoke and mirror tricks perpetuated by the Fed and the Treasury to get any true sense of those losses. This, plus over half a million monthly job losses, gives us pause to get overly enthusiastic. You hear gurus say that the jobless rate is a lagging indicator. Hey, when over 600,000 people are losing their jobs every month, that is not a lagging indicator, it is a leading indicator.

Here are the headlines since the last Newsletter about companies in the Current Portfolio; dates in parentheses are when we first recommended them. We are not giving updates about companies on the Endangered List, unless we feel the news to be highly significant.

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CSP, INC. & THESTREET.COM, INC.

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

No doubt about it, March was a fun month for the bulls. Even much of our decimated Current Portfolio got a lift from the bottom of the abyss, even some that are on the “Endangered List”. However, our optimism for the next several months is still restrained, to say the least. We still feel that new market bottoms are on the horizon, and we hope that the blow-off comes soon. It would make future planning a lot easier. Why are we still pessimistic? Think about what really triggered the recent bullishness. The CEOs of Citi and Bank of America said their banks were profitable in January and February, though that was stretching the truth. Then, the Fed sustained the rally by doubling its balance sheet, followed by the Treasury Secretary with his smoke and mirrors plan to fix the toxic assets problem. So, in sum, the market had a surge based upon spin from the same guys who got us into this mess. We will feel more comfortable once the markets begin to rally on better earnings, which is what they are suppose to do.

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ISILON SYSTEMS, INC. & 02MICRO INTERNATIONAL, LTD.

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

Since the last Newsletter, we were able to close one position for a gain.

REWARDS NETWORK (1/20/09). Closed position 3/11/09 at $3.30 for a 56% GAIN.

Shortly after reporting some very good numbers at the tail end of February, Rewards Network had a nice pop upward. It also probably helped that this is the type of company that should do well in a recession/near depression (pick one). We’re happy to get a nice gain during the current mess.

For the last several months, we have said where we feel the markets need to drop before the carnage is nearly over – 6000 to 6500 on the Dow, although 5800 on the lower end looks possible, and 1000 to 1200 on the NASDAQ. Both the good and bad news is that we are much closer to those estimates. We wish this wouldn’t be the case, but, in order to get serious buying back into the markets, investors must feel that the lows have been reached. And, once again, our own Current Portfolio remains battered and stagnant while all of this crap continues. We now have over 100 open positions, of which about 25 are on the “Endangered List”, both of these totals are at all-time levels since we started publishing close to thirteen years ago.

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OPNEXT, INC. & VIRAGE LOGIC CORPORATION

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

Two more weeks and even more murkiness. But, as we said in the last Newsletter, and in others, the bottom of the carnage is getting closer. We are still thinking 6000 to 6500 on the Dow and 1000 to 1200 on the NASDAQ. One average we have not mentioned, lately, is the Russell 2000, the measure of small caps, which, a few days ago , hit a nearly six-year low when it dipped below 400. Last May, only nine months back, the Russell stood at around 750. Pretty sobering stuff, huh? It would be of immense help if people in Washington stop “helping” the situation by throwing money all over the place, but, hey, that’s what they do best.

And we hate to keep on saying this, but, yes, our Current Portfolio keeps getting beat up along with the rest of the market. Unfortunately, many babies are being thrown out with the bath water, to use an old hackneyed phrase.

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TOMOTHERAPY, INC. LIGAND PHARMACEUTICALS, INC.

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

Since the last Newsletter, we closed two more positions, one for an okay gain and one for a nasty loss.

SIGA TECHNOLOGIES (8/20/07). Closed position 2/13/09 at $5.16 for a 54% GAIN.

DIGITALFX (12/5/07). Closed position 12/5/07 at 28 cents for a 88% LOSS.

SIGA managed to squeak by our target range when BARDA, an arm of the HHS Department, issued a presolicitation for acquisition of a smallpox antiviral. We closed DigitalFX, which had been on the “Endangered List”, when it moved to the Bulletin Board.

Our new President is one of the most intellectual people ever elected to the office, safe to say he’s in the top five. However, when at his first news conference he stood up and said “only government” can fix the problem, he unintentionally exacerbated the mess. Many of us feel that government has been the major problem. At some point, free markets, or what’s left of “free” must be allowed to work relatively unencumbered, or this Near Depression will just get worse; that’s the real lesson of the 1930s. Mr. Obama and company truly believe that massive spending is the answer, but, truth be told, we need massive tax cuts. If the President had had any economic or business experience, he would know that.

Now, there may be a bright light in all of this. We really are getting closer to market bottoms. Our best guess is that when all is said and done, we could see Dow at 6000-6500 and NASDAQ at around 1200-1250. And yes, in the meantime, expect head fakes or bear market rallies. And, once again, our Current Portfolio, is pretty much unchanged from a few weeks ago, which is nothing to brag about.

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AUTHENTEC, INC. & SUPERGEN, INC.

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

The good news is that the markets are pretty much at the same places they were at two weeks ago. That’s also the bad news. We feel the markets are still far from the bottoms that they need to reach; you know, the kind that make grown men and women weep openly. Until this happens we cannot have a new and sustainable bull market. Propping up the markets, presently, are headlines about the various government bailouts, but, eventually, markets must move on economic and earnings news, which have been awful. When do the true bottoms set in? Our best guess is between now and the end of May, when the worst of the jobless reports are behind us, hopefully. In the meantime, beware of bull head fakes. And yes, our Current Portfolio is still in shambles, so, patience, much patience, is in order.

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