Nuclear waste management is quickly becoming a hot topic both on Wall Street and Capitol Hill.
In late February, the government affairs arm of the nuclear industry called for President Barack Obama to convene a blue ribbon nuclear waste commission, a move that could be a first step toward forming alternatives to burying radioactive power plant fuel at Yucca Mountain, according to the Las Vegas Review-Journal.
The idea of forming a blue ribbon commission has been floating quietly around Washington for several months as Obama during the presidential campaign and Steven Chu, his energy secretary, have said it is necessary to revisit the management and disposal of used nuclear fuel currently stored at power plant sites.
Late last week, Chu said he, not Congress, will establish a blue-ribbon commission to develop a new strategy for managing the country’s nuclear waste.
The company’s expansive portfolio of nuclear waste treatment includes radioactive and mixed waste treatment services for hospitals, research labs and institutions, federal agencies, including the Department of Energy, the Department of Defense and nuclear utilities.
Perma-Fix CEO, Dr. Louis Centofanti recently stated that he was “optimistic that Perma-Fix will be a beneficiary of the stimulus plan,” which allocates more than $6 billion for nuclear waste clean-up throughout the Department of Energy’s complex. “In addition, the DOE fiscal 2009 annual budget has been increased to $6.4 billion, from $5.2 billion in fiscal 2008. “
The company’s fourth-quarter revenue was up 46 percent to $23.5 million, from $16.1 million a year ago. Perma-Fix generated EBITDA of $2.2 million, and net profit of $725,000, or a penny a share.
Shares of PESI trade at about 50 percent of their 52-week high, and are down about 11 percent over the past 52-weeks — substantially less than the S&P 500 and many of the company’s much larger competitors including American Ecology Corp. (Nasdaq: ECOL) and URS Corp. (NYSE: URS).
Join the discussion on Perma-Fix Environmental Services on the company official Buzz Stock thread.
Tech companies have lost their sizzle, thanks to a meteoric rise and crash, and maturity. Sure you can still make money investing in Microsoft (Nasdaq: MSFT), but you have to pick your spots–a new product launch, or big upgrade, for example.
Or buying more shares of Cisco (Nasdaq: CSCO) on weakness and fewer when the stock peaks, and making your money on dollar-cost averaging into the company’s steady 12% earnings growth, as Jim Jubak of MSN recently stated.
One of the buzz trends to keep an eye on is batteries, according to Jubak. Devices are getting smaller and more demanding. Lithium-ion batteries alone powered 50 million laptops, 800 million cell phones and 80 million digital cameras sold in 2005.
Here are a few battery buzz stocks you should keep your eye on:
1. China BAK Battery, Inc. (Nasdaq: CBAK): This company is poised to capitalize on the growing global market for batteries. Gross profit for the first quarter of FY 2009 increased nearly 50 percent, to $10.6 million, from $7.1 million a year earlier. Revenue for the quarter increased 30 percent to $68.1 million, from $52.8 million a year ago. The Company reported cash and cash equivalents of $37.2 million as of December 31, 2008, and gave revenue guidance of between $270 million and $300 million for FY2009–a 16 percent increase over 2008 at the midpoint range.
2. Ener1, Inc. (NYSE: HEV): No huge sales here–just a lot of great technology. Although the Japanese have traditionally led the battery market, Ener1 is a homegrown company with great ties to Japan. The company just announced a memorandum of understanding with ITOCHU Corporation, a highly diversified global trading company that leads the world market in distribution of specialized equipment and materials needed to produce lithium-ion battery cells. In addition to battery technology, Ener1 develops commercial fuel cell products through its EnerFuel subsidiary and nanotechnology-based materials and manufacturing processes for batteries and other applications through its NanoEner subsidiary. The company has about $18.6 million in cash, and is trading below its 50-day moving average.
3. mPhase Technologies, Inc. (OTCBB: XDSL): The company’s technologies are based on electrowetting, a unique way to store and manage power. In late January, mPhase announced that it was “getting close” to selecting a contractor to construct the company’s AlwaysReady Reserve Battery, that will be used in the AlwaysReady Emergency Flashlight. According to a recent news release, the AlwaysReady Reserve Battery is a manually activated lithium reserve cell with a minimum storage life prior to activation of 20 years. This is a promising, high-risk, micro-cap, penny stock.
I recently watched an interview with Tim Sykes, the author of An American Hedge Fund. Sykes, who’s in his mid-20s discussed a few reasons why your 20’s may be a good time to explore the volatile world of micro cap stocks.
Here’s the interview:
Now, before you get too excited, there’s a lot of downside to playing penny stocks.
Investopedia.com has a great primer for anyone interested in highly volatile penny stocks.
According to Investopedia, there are four main reasons to be leery of penny stocks:
1. Lack of reliable information available to the public: The key to any successful investment strategy is acquiring enough tangible information to make informed decisions. For micro cap stocks, information is much more difficult to find. Companies listed on the pink sheets are not required to file with the SEC and are thus not as publicly scrutinized or regulated as the stocks represented on the NYSE and the Nasdaq exchanges; furthermore, much of the information available about micro cap stocks is typically not from a credible source.
2. No minimum standards: Stocks on the OTCBB and pink sheets do not have to fulfill minimum standard requirements to remain on the exchange. (Read What are the listing requirements for the Nasdaq?) Sometimes, this is why the stock is on one of these exchanges. Once a company can no longer maintain its position on one of the major exchanges, the company moves one of these smaller exchanges. While the OTCBB does require companies to file timely documents with the SEC, the pink sheets have no such requirement. Minimum standards act as a safety cushion for some investors and as a benchmark for some companies.
3. Lack of history: Many of the companies considered to be micro cap stocks are either newly formed or approaching bankruptcy. These companies will generally have a poor track record or none at all. As you can imagine, the lack of historical information magnifies the difficulty in picking the right stock.
4. Liquidity: When stocks don’t have much liquidity, two problems arise: first, there is the possibility that the stock you purchased cannot be sold. If there is a low level of liquidity, it may be hard to find a buyer for a particular stock, and you may be required to lower your price until it is considered attractive by another buyer. Second, low liquidity levels provide opportunities for some traders to manipulate stock prices, which is done in many different ways – the easiest is to buy large amounts of stock, hype it up and then sell it after other investors find it attractive (also known as pump and dump).
Even with all the risks associated with penny and micro-cap stocks, there is a lot of upside if you choose the right ones to get behind.
Here are 3 Penny Buzz Stocks that we think are worth keeping an eye on:
Glowpoint, Inc. (OTCBB:GLOW): If you’re an avid ESPN viewer, you’ve probably seen Glowpoint’s technology at work. The company provides high-quality video conferencing technology to media companies. Trends like high definition video on the Web are creating a lot of opportunities of Glowpoint to grow its customer base, and develop new solutions. The company has a trailing P/E of 7.8, and has quarterly (yoy) revenue growth of 4.5 percent. Glowpoint has about $1.7 of cash in the bank, and earned about $0.51 per share last year.
Soyo Group, Inc. (OTCBB: SOYO): This computer, and consumer electronic products maker just unveiled 20 of its newest products at this year’s Consumer Electronics Show including bluetooth adapters, external hard drives, and HD TVs. The company’s Honeywell line of HD TVs is also being sold on Feb. 7th on HSN this Saturday. 9, Management projects total revenue will be approximately $110 million, with approximately $2 million in profit and $0.04 earnings per share.
Goldspring, Inc. (OTCBB: GSPG): Hard assets like gold and silver could make a comeback this year in light of the shaky global economy. The company just announced test results that revealed strong gold and silver mineralization in the deposit at the Hartford Complex in the Comstock Lode District of Nevada. The stock could be primed to make a run in the next few weeks, as the company is planning to announce
Just remember, penny stocks are volatile and erratic. If you buy a stock at $0.10 and sell it at $0.15, that represents a 50% return on your investment. A 5 cent decline, however, would leave you with a 50% loss. Many stocks trade in this range on a daily basis. If your investment capital is $10 000, a 50% loss is a $5000 loss. Do this twice and you’re investment is gone. Keep your stops close. If you get stopped out, move on.
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