Penny Stock Pick - XNL

This is the penny stock in the right industry. As the oil has surged to $100 per barrel, investors are scrambling to find stocks in alternative energy. One of the hottest sector to put the money in is probably ethanol as goverment sign energy bill in early December of 2007 that will boost ethanol production. Here fortunatley we found a penny stock which is in the ethanol industry called Xethanol (XNL) which surged 27% today to 87 cents per share as the company extends research agreement with National Renewable Energy Laboratory. Let's take a look at the detail of the stock and see if it is worth putting the money.

Technical
Although the stock didn't perform well last year, we should see a rebound this year as the technical chart now shows positive momentum is back as MACD is now back above 0. In addition 20 day moving average recently crossed on top over 50 day moving average which is a very positive sign.

Insider
The insider has been buying the stock aggresively in August and September last year at $1 per share. This is a really good sign considering the current price is below that. Although there as been no transaction from the institution last year, looking at the major holder and you'll see top player like Goldman Sach still holds about 888,899 shares.

Financial
In 2006 the company had major improvement in revenue from 4 million in 2005 to 11 million. The company should probably generate similar result in 2007 as the revenue so far is about 8.4 million. However the net loss is still high so in another two quarters financing is needed again.

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