Penny Stock Watch - LCC

Sometimes the best time to invest a company is when the company is in trouble. This may be the case for US Airways(LCC), a major airline company which has been in deep trouble due to skyrocketting fuel cost. Now that oil price is dropping this is probably the time to look at the stock.

Technical
The technical chart shows the stock is due for recovery as MACD is back above 0 and K line is on top of D line. In addition the stock is also back above 50 day moving average showing positive momentum.

Insider
One insider was very optimistic about the future of the company and bought 197,000 shares at $2.77 per share last month, a positive sign. The insitutions however were still bearish and sold 4.7 million shares last quarter.

Financial
The financial statement shows this is a company in danger as the latest quarterly report came with net loss of $567 million, doubling the loss of previous quarter.

Conclusion
Financial companies are bad. But the company that can generate net income should be a great one to buy while it is cheap.

Penny Stock Score (1~5) 5 is highest
1. Industry (airline): 2
2. Technical: 4
3. Insider: 3.5
4. Financial: 2
Recommendation: Accumulate

Penny Stock Watch - UCBH

The other company hurt by subprime crisis is UCBH Holdings Inc. (UCBH), the holding company for United Commercial Bank which provides banking service to small and mid size business. For the past 52 weeks the stock went from $20 to as low as $2.17 per share recently, a 90% drop. However recently the stock came back alive and is now trading at $2.87 per share. Maybe this is the time to buy the stock at bargain price.

Technical
The technical chart shows the stock is in a bear market as it is way below both 50 day and 200 day moving average. One positive sign is KD which is rising.

Insider
The insiders are very bullish about the company and have been buying shares this year. The institutions however are still bearish about the stock.

Financial
Despite huge drop at net income, the company is still getting positive income which is a good sign. The cash level is low so the company is still borrowing money and selling stocks.

Conclusion
Financial companies are bad. But the company that can generate net income should be a great one to buy while it is cheap.

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

Penny Stock Watch - ABK

The subprime crisis turned a lot of financial blue chips into junks and even into penny stocks. One of them is Ambac Financial Group, Inc. (ABK), a leader in credit insurance. A year ago last July, ABK was still a $100 stock. Yet the financial crisis and panic investor send the stock to as low as $1.04 per share reaching a multi-year low.

However in the past few days the stock came back alive with a 50% gain on Tuesday on bargain hunting. So is this a penny stock worth buying?

Technical
There is nothing positive about the technical chart except KD which is now rising. All other indicators still point to a bear market.

Insider
The insiders are actually very bullish about the company and were buying the stocks aggressively last month. The institutions are also heavy buying the stocks.

Financial
The income statement looks miserable as the company went from net income of $213 million in March of 2007 to net loss of $1.66 billion in March of 2008. The company's cash is a little better in March but is still dangerously low. The cash flow statement isn't good either as the company is still losing cash in March.

Conclusion
The insiders are the only positive indicator. It may be good to wait a little while.

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

Penny Stock Pick - TGC

Tengasco Inc. (TGC) is a crazy little oil stock. Not long ago in April the stock was still trading at under 60 cents per share. However within two month the skyrocketting oil price draws speculator and send the stock up to today's new 52 weeks high of $2.99 per share. Considering oil is a hot industry now, this may be a stock worth looking at despite the recent run.

Technical
The technical chart shows the stock is now in a very strong upward momentum as both 50 day and 200 day moving averages are going up along with the stock. MACD and KD als shows the stock is currently in a bullish market.

Insider
There is no insider transaction this year. The insititions however are slightly negative about the company and sold 100,358 shares.

Financial
Very positive sign as both revenue and net income have been up steadily annually and in recent quarters. The balance sheet shows the company is a little short on cash but should be ok since it is generating net income.

Conclusion
Do anticipate correction in the short term. For the long term this is a stock ready to remove it's penny stock tag.

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