3 Disgusting Stocks That Exemplify PennyStocking, Don’t Hate The Game, Become A Playa!
Screw Vegas, Screw Wall Street, Welcome To The Gutter, There Be Gold Yonder!
Despite the marketing efforts of low priced stock pumpers on all the message boards, I’ve been rather negative on Force Protection (FRPT) for a while now—I hate when management says everything’s fine when clearly, as evidenced by the near perfectly downtrending stock chart and negative comments from its major customers, everything’s not. But with Friday’s orders (already expected) and this weekend’s positive NY Times article, maybe, just maybe, the perception tide is turning. I’ll wait and see if the stock can extend much beyond Friday’s 10% rally—and while I doubt we’ll be seeing double digits anytime soon—there does seem to be a base forming around $4, so the downside appears limited. Then again, when management loses credibility, who knows what to believe (other than the stock chart, that is). If you think I’m not taking a stand on this one, you’d be right, too many conflicting variables for my tastes.
Much clearer to me is one of the worst public companies in existence, Nanogen (NGEN). I was shorting them back when it was briefly a stock teenager (early 2004) and you were in diapers (penny stock knowledge-wise)—and I even detail losing quite a bit on this one in my book (it took me a while to learn never to short in the morning due to the risk of severe morning spikes, aka morning spikeness) (woahhh, how cool is that phrase, gracias blogging)…How beautifully bearish is the 1, 2, 3 and 4-year charts–those Picassos of failure–all you have to do is bet that their continual failures will influence shareholders to sell rather than buy and you’d be right.
But I can’t even give the company credit for being such a perfect failure because this chart is true for most biotech penny stocks. That’s right, NGEN can’t even get failing right, they’re a failure at failing, too, especially now because the stock is trying to bounce off its 25 cent lows. For shame! Why can’t they just stick to do what they do best? Well, I guess it’s just human nature to be optimistic and that’s why they have some new management and financing, oh well, just a bump in the road until their probable doom, hopefully they’ve hired some penny stock pumpers to get their price up enough for me to short into. Oh wait, they already have! All disclosed (as legally required) (what a joke) at the bottom of the PR for the “research report”!
C’mon Dutton, you got your $140,000, now get to work, you call a 10 cent rise to 45 cents something to be proud of?!?!? Bleh! I can send out a newsletter and get a crap stock up 10 cents and I’d only charge $50,000! (Not that I ever would). I’m just writing this to get you pumped up (I pun, I pun)…so, come on, get this stock over $1 so it becomes a worthy short! Get it to $2 and I’ll get you something from the Apple Store
And then there’s China Shen Zhou Mining & Resources (SHZ), a stock so screwy that even Thinkorswim didn’t recognize the symbol when I tried to buy and then later borrow shares to short into the company’s 50% Friday run-up (supposedly to be fixed by Monday). You don’t have to be as cynical as me to be weary, this is a Chinese metals company that just moved from the Bulletin Boards and whose stock has admittedly been manipulated in the past.
Who knows and who cares what was responsible for the spike—metals are surging, the message boards were jabbing away about it, blehhhhh—all that matters is how it traded. Despite the biggest volume this stock has ever seen, during its afternoon spike, there was a ridiculous spread between the bid and ask—think 20-50 cents—because the buyers weren’t random or gradual, instead, it was just a few big market orders of 5,000 to 15,000 share blocks taking out whatever sellers out there, 6, 6.50, 7, 7.25, they just wanted to buy at any price!
And, so, as much as I like shorting into manias like that, you really have to be extremely careful because stocks like these can go up $2-$5, sometimes even $10 within a few minutes and hours. Those super-spikes can be averaged into from the short side, but do it verrrrry gradually because you never know how long they’ll last. When the big block buyers are all in, there’s usually a quick drop followed by a gradual decline as sellers and reason re-enters. Manipulation? Blatant! Is it the company’s fault? Doubtful. Can you learn to profit from it? Definitely!
Think I’m overly cynical, whatever, this is how I play PennyStocking. Less cynical but just as knowledgeable people should enjoy greater success than I’ve had. Either learn to play by the rules or get slaughtered with the rest of the suckers who buy into all the BullShip!
SEC Fun Label: No positions, just explaining the game
PS To the penny stock promoters/manipulators, don’t be angry with me, please don’t bust my kneecaps, I love what you’re doing, keep it up! I’m not trying to get rid of you, I’m trying to make this game more transparent / understandable and fun for everyone. When I’m successful, no longer will you have to resort to ripping off poor amateurs….no, the wealth of the players will rise, the market will become more liquid and volatile and your fees will only go higher! So c’mon, do your jobs, I’ll do mine, together we can take this sport mainstream!
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Stock Watchlist
| PDO | $20.12 | |
| MXC | $34.78 | |
| CPSL | $5.73 | |
| CDY | $2.97 | |
| FPP | $5.68 | |
| CASH | $25.01 | |
| KYUS.OB | $3.75 | |
| HYBR.OB | $4.88 | |
| FORC.OB | $2.15 | |
| MMGW.OB | $1.81 | |
| CNEX.PK | $3.65 |
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| Date | Stock | Buy | Sell | Net |
|---|---|---|---|---|
| May 22 | FPP | $6.25 | $7.00 | $505 |
| May 21 | PDO | $27.49 | $26.38 | $343 |
| May 21 | FPP | $8.02 | $7.44 | $599 |
| May 19 | MXC | $27.50 | $27.08 | $95 |
| May 19 | FPP | $4.13 | $3.92 | $363 |
| May 16 | KYUS | $2.50 | $2.49 | $67 |
| May 12 | CNEX | $7.20 | $6.00 | $740 |
| May 7 | VRML | $3.05 | $3.75 | $890 |
Total: $17,636 ( 
42% )
1steve
February 23rd, 2008 at 11:15 pm
I want to believe in FRPT, I really do. Great product, seems to be a good employer. The problem with FRPT is that the government really doesn’t want to spend a million dollars per vehicle to save a few lives. This company could be a candidate for a buyout from General Dynamics or another major player, in which case their stock might double, but their fight is in whether or not they have enough cash on hand prior to that happening, in which case they might go to zero. Looks like a nice play for Tim in the meantime.
2timsykes
February 23rd, 2008 at 11:30 pm
don’t want to believe in them. they’re a POS. buyouts are always possible. so are big contracts, but its not predictable. i want volatility in the stock instead of this 50 cents here and there crap before i ever play this one
3Al
February 24th, 2008 at 9:35 am
Well in already bought 700 shares at the close on friday. I’ll know by 10:00am monday. I also like gambling but I like predictability better. This is why I am watching the DVDs for the second time.
4Chris
February 24th, 2008 at 9:42 am
Tim,
Telling the truth to people who visit your site might be a great start. It’s true many FRPT investors love the product and love the fact that Force Protection REALLY does make the best MRAPS out there which are PROVEN to save lives . It’s one big reason the tide is turning for the US in Iraq/Afghanistan. You see, it’s hard to lose when your soldiers can’t die on the battlefield.
2nd- FRPT has not been a “penny stock”-under 5 bucks until the last few months. I’ve seen you on MOJO Wall St Warriors and know you LOVE to Short Pennies with no underlying value who have run up, in fact it’s your business model no? No doubt you were part of the hedge groups who helped drive FRPT down. Hey, you made money- I can’t fault you as that’s the game. However, many months FRPT continued on the Naked REG SHO List and trades weren’t settled. As you say, many shorters used innuendo and marketing to act like the MRAP market was dead to help drive the price down!! The shorts have been guilty on the same things you accuse longs of.
3rd- check out the massive long positions taken by Fidelity, Heartland, and Franklin Templeton recently. They’re not exactly someone you should be so confident to trade againt now that FRPT has bottomed and the stock just closed above its 50 day Moving Average. FRPT has a low P/E and P/S almost half what typical defense contractors have. As you seem to hint, the trade in FRPT is too the long side now. If you’re hedge buddies decided to cover the illegal nake shorts, where would FRPT’s price be right now?
Final Point, FRPT management is one of the only companies who didn’t constantly tute its own horn as it lets the product sell itself. Maybe that will change with the new IR firm out of Westbrook, CT.
Take care
5timsykes
February 24th, 2008 at 11:20 am
Chris, I could care less about the quality of FRPT’s product, don’t drink the Kool-Aid. FRPT was a penny stock long before the war began and the odds are high thats where they’ll remain now that the war is all messed up. The fact that big firms are taking positions only reduced FRPT’s credibility, 70% of those firms underpform the market, they’re monkeys throwing darts, again, don’t drink the Kool-Aid. And finally FRPT’s management is crap. Only your chart can save you now.
6Chris
February 24th, 2008 at 12:01 pm
This is the problem with TA folks who don’t know fundamentals and use the chart to judge a company, they’re early to the short side and late to the buy side. Chart says buy, consolidated near 4 since you’re into TA only and admit no fundamental research has been done.
New CEO coming soon, new Director was announced last week with huge DOD and WEF connections. The only kool aid I am drinking is the one that stopped me from buying FRPT near 20 when it was on my watch list and to buy near 4, near the dirt cheap list.
You’re right, 70% of them are doggie doo doo- but don’t confuse a broken stock with a broken company. And don’t confuse a broken company with a broke company.
7timsykes
February 24th, 2008 at 12:25 pm
I’m ALWAYS late for a move, and thats why I’m never sitting around for my stocks to be in play. Blah Blah Blah to your details, but you’ve got a real company on your hands and real companies have real problems that really suck. I prefer broke/broken companies–not only are they more volatile, but I know for a fact that things can’t get any worse.
8Chris
February 24th, 2008 at 1:27 pm
Ok…here’s the details you should care about as a TA guy and trader: FRPT traded very nice volume on Fundamental News and Closed above 50 day MA. Hasn’t done that in a while. See ya
9timsykes
February 24th, 2008 at 1:54 pm
I could care less about moving averages, I buy into breakouts. Normally I do best by buying into stocks breaking out to new highs, but for FRPT, $5.25 looks to be a key point. And I wouldn’t be so proud of Friday’s action, it was all jut a spike at the open followed by steady downtrending…
10Mike
February 24th, 2008 at 2:32 pm
Tim - thanks for the response on the yahoo board. I agree there are alot of unknowns. But if you look closely to the few simple facts below, do you honestly think that this company will not get a big contract relatively soon?? The Cheetah is the big ??? but as the points below show, a significant contract for these vehicles seems inevitable in the short-term. Can you talk to these points? Your feedback is appreciate. Thanks again:
1) Top Brass of USMC visits and drives Cheetah (posted on Department of Defense web-site, not Force’s web-site: http://www.defenselink.mil/Pho.....spx?ID=575
2) Dupont is building a $500 million dollar plant to support Force Protection - why?? http://www.manufacturing.net/N.....menuid=274
3) Force asks (and gets) an extension of a $50 million line of credit from March to May of this year. March of this year is when more MRAP contracts will be issued. Coincidence?? - http://biz.yahoo.com/e/080215/frpt8-k.html
11timsykes
February 24th, 2008 at 2:49 pm
I don’t care to research/speak further about FRPT, it’s just not predictable like I like so this is all just guesswork. Wait for the chart to concur with your thesis, otherwise you’re just gambling
12FL_Geezer
February 24th, 2008 at 9:52 pm
You could try using the E-Zone System to trade this and others like it, especially if the price is low and the volatility high. E-Zone stands for Entry and Exit Zones, and they give you these by 6:00 p.m. for next day trading.