Penny Stock Pick - UDW

The penny stock on the spotlight today is US Dataworks Inc. (UDW), the Houston, Texas based company developing payment processing software to bank, credit card company, retailers and government. Recently the company signed contract with Bank of Oklahoma to deliver its accounts receivable conversion solution. Since then the stock has rose for three consecutive days and added 8.75% or 7 cents to 87 cents per share, near 52 weeks high. Not only the news the following analysis show why this is a great time to buy the stock.

Technical
The technical chart shows very positive signal as the 50 day moving average has crossed on top over 200 day moving average to form Golden Cross. In addition with MACD still rising and MACD on top over signal line, the stock is now in a strong bull market

Insider
The insider transaction shows mix signals with some purchases and some sales of the stock. All the buys came in ealier 2005 and late 2004 while the sales were mostly in mid 2005.

Financial
The income statement shows strong sign of growth as the company is expected to generated a lot more revenue for the fiscal year of 2005, $3.7 million for three quarters so far, compare to only $2.6 million in the previous fiscal year. In addition the company is also expected to have significantly less net loss or even net come for the fiscal year of 2005 compared to net loss of $6 million in the previous year. However since the company's cash level is still falling, it will still need to continue sell stock or borrow money.

Penny Stock Score (1~5) 5 is highest
1. Market Potential(financial software): 4
2. News: 5
3. Technical: 5
4. Insider: 3
5. Financial: 4
Recommendation: Buy