Penny Stock Pick - REV

It is really sad to see a billion dollar company becoming a penny stock trading in the $1 range. Don't be mistaken, Revlon Inc. (REV) still an American icon selling women's makeup, skincare and fragrances is still generating $1 billion dollar in revenue every year. However that is probably the only positive from the financial statement as the company is still losing tons of money year after year and the company's total liabilities are more than twice of the total assets. In another word, at this point the company is worthless on paper.

Yet this morning's third quarter earning release provides glimpse of hope as the the net loss is reduced 90% from $100 million to $10 million while revenue rose 11% to $339.7 million compared with 309.5 million. Both figures top analyst estimates.

Technical
The technical chart shows this is still a weak stock as 50 day moving average is still below 200 day moving average. MACD which just dropped below 0 again recently indicating a bear signal as well. One positive signal is KD where K line just crossed on top over D line showing a rally is about to begin.

Insider
The management team is not as negative on the stock as one director bought a quarter million shares earlier this year. The institutions are also quite bullish about the stock and purchased 10 million shares in the latest quarter.

Financial
As mentioned earlier, the balance sheet is still a mess but hopefully the reduced net loss could bring the company back to the right track again.

Penny Stock Score (1~5) 5 is highest
1. News: 4
2. Industry (Cosmetic): 4
3. Technical: 2
4. Insider: 4
5. Financial: 1
Recommendation: Buy