Penny Stock Watch - SMRA

Today the research firm Merriman Cuhan Ford begin to cover the penny stock SMRA with a buy rating. After the analyst coverage, shares of Somera Communications(SMRA), a Coppell, Texas firm providing equipment lifecycle management services to telecommunications carriers have surged 11% to $0.89 per share as the analyst sees the stock should be trading at $2 per share, more than 100% of the current price. The analyst loves the stock citing greatter market opportunity and strong financial - $22.5 million in cash with no debt.

Looking at the technical chart the stock hasn't done well this year as share price dropped from $1.4 in the beginning of the year to 52 week low of $0.70 per share in December, a 50% drop. Recently the stock is on a short rally with KD pointing upward and MACD climbing from the lows. The stock is now trading above 50 day moving average but is still a long way from the 200 day moving average with MACD still below 0.

From the financial statement the company is seeing continuous slide in revenue but has trimmed net loss. However we are still wating for the 2005 annual report which should tell how the company do during the economic recovery.

Penny Stock Score (1~5) 5 is highest
1. News Buzz: 4
2.Technical: 2
3.Financial: 2
4.Market Potential: 4

Recommendation: Buy