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UDS
Group Joins The NRA... |
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 ...and
no, we don't mean the National Rifle Association.
The National
Restaurant Association's newest member is Universal Delivery Solutions
(UDSG.PK). Though
not a restaurateur itself, they do have an interest in the industry - it's
their proverbial bread and butter (no pun intended). Being a part of this
organization gives the company instant visibility to those restaurants
possibly interested in using UDS Group's delivery/pick-up service.
The key membership
benefit to UDS Group, however, may be a bit underestimated with just a
casual look. As an NRA member, UDS is also able to attend the organization's
trade show in early 2008. The 'big deal' is how nearly all of the major
food service chains send management members to the show to check out the
latest and greatest ways to improve their restaurants. We expect UDS
to be a stand out for one key reason - there's nothing else like their
service, anywhere.
More than that,
UDS will be able to tell them some words these restaurateurs want to desperately
hear.....a curbside pick-up or delivery offer can realistically help a
restaurant improve revenues by as much as 25% within a couple of years.
We believe that statistic, coupled with the novel way UDS can help them
achieve that goal, should make a big splash with the 75,000 show attendees.
Being in the
NRA and attending its trade show could end up being a catalyst for the
company, and by extension, its stock. They've never been to the show before,
and very few people within the industry are aware of who and what they
are. Only a handful of restaurants are currently utilizing the service,
as UDS has spent the last several months refining it before it's rolled-out
on a mass scale.
The service,
however, is now ready for a mass roll-out. And by the time the show
is over, most of the industry will have been introduced to UDS Group's
offer. We expect the company's revenues to really start growing shortly
afterwards.
Though not every
company we ever talk about is placed in our limited stable of stocks, we
do try and keep tabs on them for your benefit. When we revisited the following
small cap names this week, we found some rather note-worthy developments.
Remember GlobalScape
Inc. (NASDAQ: GSB)?
Our first look was on May 25th, when the company was still trading
as a bulletin board stock. It's graduated to a NASDAQ listing since then;
notice the ticker changed to 'GSB'. You may also have noticed the current
price around $4.32 is much higher than the $2.79 level we saw it trading
at when we first found it. That's a solid 54.8% gain, and it had been even
higher until last week's broad market pullback. Even so, we believe the
stock is holding its ground now, getting poised for another rally attempt.
Anyway...
It's probably
no big secret our research staff feels the shrinking supply of potable
water also makes for an outstanding small cap investment opportunity. We've
published a focused newsletter a couple of times on the topic, in addition
to a handful of blog entries. Since then, stocks of some of the companies
we mentioned have fallen back....but done so in an orderly fashion. The
bigger trend for a select few of these equities appears to still be bullish,
making the short-term slide an advantageous entry window.
Take Basin
Water Inc. (NASDAQ: BWTR)
for
instance. When we first looked at this water treatment company on June
29th, shares were trading at $8.70. By mid-July, they reached as high
as $13.20....a 51.7% move. Don't worry if you missed it though - the stock
didn't hold onto that gain. Rather, being too much of a gain in too short
a period of time to sustain, BWTR eased back to a low of $9.92 on Wednesday.
Thursday, on
the other hand, may have marked the beginning of a recovery effort. The
stock closed at $10.70, up 47 cents from the previous day's close, after
a couple of brushes of the 20 day moving average line. We also saw a higher
trading range. We believe the current chart is a more attractive opportunity
than the one from merely two weeks ago - when shares were peaking.
Something similar
could be said about WorldWater & Power Corp. (OTCBB:
WWAT). We first found it on June
6th. At the time of the blog entry, shares were trading at $1.25. By
July 23rd, the high of $2.51 literally meant its value had doubled.
But, it would only be doubled for a very short time....starting
the next day, WWAT made its way back to a low 0f $1.87 (which still isn't
a bad gain).
The key difference
between WWAT and BWTR - and our key concern - is how WorldWater's
stock hasn't made much of an effort to point itself higher again. The 20
day line has not been support either. Despite the technicals though, we
still feel this one is worth watching. We'd just like it even better if
the buyers started getting a little more traction. The stock is not fully
oversold yet (stochastically), but should be soon. Perhaps that will be
a catalyst for the next leg higher.
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Is
A Rebound In The Cards? |
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Though we still
hear the echoes of last week's market misery, things may well be on the
mend. We've seen two days of gains now, and for each of those days, the
gains have come very late (last half hour) in the session. Some experts
believe that's an indication of institutional-level buying.
Whether it is
or isn't 'big money' stepping in, we also noticed the bounce so far also
occurred right as the S&P 500 and the Russell 3000 found their 200
day moving average lines. This moving average line is frequently considered
to be a good indication of the market's overall momentum. To see it hold
up as a floor is generally encouraging, though a big move higher now is
still not (or ever) a guarantee.
Simultaneously,
it appears as if the CBOE Volatility Index (or VIX) has peaked, and is
now pointed lower. The VIX has an inverse relationship with stocks, and
more importantly, tends to hit the extreme limits of its range right as
the market is making a top or bottom. We may have seen such a VIX peak
on Wednesday, when it hit a new multi-year high of 26.22 before settling
back in to close at 23.67. Thursday's close of 21.22 was decisively lower,
and hints that more of the same downward movement may be in store. If that
truly is the case, as we believe it is, then the market may have already
made a short-term bottom this week.
Keep in mind
anything
can and will happen. The VIX may end up moving even higher, while stocks
fall back under the 200 day average and on to even lower lows. The tendencies/odds,
however, are on the bullish side of the fence so far.
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Updated: 9:18 am PST (17:18 GMT), January 5, 2009
