Penny Stock Pick - SGN

The penny stock on the spotlight today is Signal Life Inc.(SGN), a medical device maker. Recently the company announced it has finished testing of a module for its holter and intra- cardiac monitor, an important part of the business plan. Looking also at the chart there are signs that the stock maybe ready for a rally.

Technical
The technical chart shows positive sign as the stock has been on the upside since late August and the stock has been above both 50 day and 200 day moving aveage since September. In addition with MACD still above 0 and ROC at low the stock could be going up at this point.

Insider
The most recent insider transactions were bullish with two purchases from the director. However the institutions are still bearish and sold 254,436 shares in the latest quarter.

Financial
The company is still in the development stage and has yet to generate any revenue. The net loss is still high while the cash level is very low. The company will need to raise cash either by selling shares or borrowing money in order to sustain the business.

One sign to look is the cash level. If the company can get additional funding it is still a good bet.
Penny Stock Score (1~5) 5 is highest
1. News: 4
3. Technical: 4
4. Insider: 3
5. Financial: 1
Recommendation: Hold