Downgrade Alert - FONR

Turning Junk Here in Penny Stock Pick we rate penny stock by news, market potential, insider, financial statement and technical chart. The average rating of the stock is then used to determine how we would recommend the stock from Strong Buy to Strong Sell. After continuous weak trend in the stock, we are downgrading the rating of Fonar Corp.(FONR), the Melville, New York based MRI scanning equipment maker. Last month the company has received delisting notice from Nasdaq due to low bid price. This news probably scared away more investors. Belows are the updated analysis and rating on the stock:

Technical
The technical chart still shows bearish sign as the stock is trading below both 50 day and 200 day moving average with both moving averages going downward. The other technical indicators such as MACD and KD also show sell signal as MACD is below 0 and K line is below D line.

Insider
Although the president has been bullish about the stock with purchase of abuot 200 thousands shares in May, the intitutional players are bearish on the stock and have sold 1.4 million or 85% of the shares in the latest quarter.

Financial
Although the company has generated 30 million more in revenue in fiscal year of 2005, the most recent three quarters show negative sign with continuous slide in revenue. As the result for the fiscal quarter of 2006 which should be coming pretty soon the revenue would be significantly lower while the net loss would surge compare with net income in 2005. Moreover the company are still selling the stock for the most recent quarters.

Penny Stock Score (1~5) 5 is highest
1. Market Potential(MRI Scanner): 3
2. News: 1
3. Technical: 1
4. Insider: 3.5
5. Financial: 1
Recommendation(1.9): Strong Sell