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Wednesday, March 15, 2006

Penny Stock Pick - PLC

Medical Miracle The penny stock company on the spotlight today is PLC Systems Inc. (PLC), a Franklin, MA based medical device company for cardiac and vascular markets. The company today reports an decrease in revenue and a net loss for the fourth quarter of 2005 comparing with same quarter of previous year. However the main focus from the investors are not the so so quarter result but the newly revised cardiac laser deal with Edwards Lifesciences which will bring in $1.5 million for manufacturing and development rights for laser and $1.7 million for royalties on future revenue. The deal helps boost the stock 5 cents or 8.62% to 63 cents per share on twice the average volumn of 101,300 shares. Let's take a detail look at the stock and see if this is the right time to buy the stock.

technical chart shows this is the perfect time to buy the stock as ROC is at record oversold level near -0.2. The KD line is also showing possible buying opportunity as K line may be about to rise on top of D line as both are at low of below 20. In addtion the 50 day moving average has crossed on top over 200 day moving average around early February to form the Golden Cross. Typically when a Golden Cross is formed the stock will be heading into a strong bull market. The negatives to watch from the technical chart is MACD which is about to drop below 0 and also the stock price which is declining towards 200 day moving average.

There is no transactions recently from the company insiders. However the institutions have purchased additional 40 thousands shares in the latest quarter.

The revenue for the fisical year of 2005 is slighly higher than the previous year according to the earning announcement today. However the net loss for 2005 increased to $1.2 million in 2005 comparing to net loss of $0.8 million in 2004. The increase in net loss was due to additional research and development cost which actually was a plus sign for a technology company. The balance sheet may fluctuate a little bit as the company converted 70% of the cash into investments beginning at the first quarter of 2005.

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


Blogger participant42 said...

Your analysis should also mention that the compnay has $0 debt, and about $11M in cash, and has only 30M shares outstanding.

1:25 PM  
Blogger participant42 said...

Further, during the Conference call today, PLC reported that initial studies on their new product/technique (so far it's been shrouded in mystery, and will be publically revealed "in a few months") are "very encouraging." This is for the most part where their increased R&D expenditures over the the last year have gone, and *might* be the most significant event of all the facts that you have already mentioned.

2:16 PM  

PLC appears outstanding.

10:16 AM  
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