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Two
Votes For Financials? |
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In
the December
11th edition of the Micro Cap Press newsletter, we took an in-depth
look at some of the market's sectors. And, we made a handful of
forecasts. One of the 'long-shots' we put out there was financial stocks
- they had been beaten up so badly, the value proposition they offered
was enticing.
You may also
recall, however, we were waiting for the market to burn through all of
its pessimism on the financial sector. Only then would a rally attempt
go mostly-unblocked.
Though it's
still not a risk-free opportunity (but what is?), this sector received
an interesting passive endorsement a few days ago from some of the biggest
names in the business. Warren Buffett - through Berkshire Hathaway
- purchased a majority stake in Marmon Holdings...a financial stock. Martin
Whitman - Third Avenue's legendary value investor - has been accumulating
other financial stocks over the last few weeks as well. Some of his newer
additions include real estate entity Forest City Enterprises (NYSE:
FCE-A), bond insurer Ambac Financial (NYSE:
ABK), and S&L outfit FedFirst Financial (NASDAQ:
FFCO).
Were it 'Joe
Schmo Investments' newly interested in financial names, the buying
may be easily dismissed. But, Warren Buffett and Marty Whitman are hardly
Joe Schmos. Much like the attention E.F. Hutton mustered in the 80's, when
Warren Buffet talks, 'people listen'. Well, we listen anyway...because
the guy's one of the best. If he's interested in financial stocks
again, then so are we.
Like we said,
it's not all smiles and roses for this sector starting immediately. On
the other hand, if it's good enough for Buffett and Whitman, maybe it really
is
safe to start testing the waters.
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Universal
Delivery Solutions: One Step Closer |
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 Last
week, micro cap company UDS Group (OTCBB:
UDSG) officially got one step closer to getting its stock listed
as a bulletin board equity. The required audits we first mentioned back
on August
14th are now completed. Now that there are two years worth of verified
results, UDS can submit the appropriate application to the SEC.
UDSG currently
trades as a pink
sheet stock. That's fine, though not an endpoint for a company looking
to grow the organization the way UDS Group wants to grow their operation.
However, since the SEC requires to years worth of accounting statements
to make sure a company has the right mettle to maintain the minimum requirements
for a bulletin board listing, the data has to first be gathered - and
audited - before a decision can be made. Now that UDSG's data is compiled,
the next step is clear....file the application.
We believe this
application could be finished and approved sooner than later. There's even
a possibility UDSG could be trading on the bulletin board by the first
part of next year, depending on when they submit the paperwork. Regardless
of 'when' though, the higher-level exchange and improved stature
should help the stock trade well.
Here's
the press release.
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A
'Clean' Way to Play Clean Energy |
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Back
in May the Micro Cap Press rolled out our thoughts on the future of
'clean energy', and potential investments in the field. We presented
a few specific trading ideas at the time as well. Though it's still too
soon to make a success/failure call based on this macro trend, it's not
too soon to put another idea on the table...if only for discussion. What
about an ETF?
The PowerShares
WilderHill Clean Energy ETF (AMEX:
PBW) has been making solid progress, in terms of gains as well
as trading volume. It may now be liquid enough to take on sizable positions.
More importantly though, it may be an easy/clean (no pun intended) way
to play this macro trend without needing to become an expert on alternative
energy.
Just for the
record, yes, we still think individual stocks are better
choices for speculators who have the time and inclination to swim in these
waters. If that's not you though, a clean energy industry fund can be attractive.
In fact, PBW
has already provided some huge rewards. It's up 77% in a little less than
three years, easily outpacing the rest of the market. On the other hand,
PBW
may be a victim of its own short-term success. It's been on a serious tear
in just the last few days alone, and is well overbought. If you're
interested, it may be wise to wait for a good pullback. And, as volatile
as this chart is, that shouldn't be too long in the coming.
We may or may
not follow-up with PBW, but we did want to get the idea on the table
in case you were looking for something like it. Speaking of clean energy
stocks...
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UGTH
Erupts Like a Geyser |
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The people running
U.S Geothermal (OTCBB:
UGTH) may spend most of their time turning geysers into revenue,
but the company probably never expected its stock to erupt with a bullish
geyser of its own. That's what it did though - yesterday's close of $3.71
was 37% better than last Tuesday's close of $2.71. Moreover, the surge
broke a six-week losing streak.
What prompted
the sudden strength? That's the odd part...nothing. Of course,
that may be the good part too - stock's often 'predict' news. Though there's
nothing we saw on the short-term radar that would necessarily inspire a
round of buying, clearly somebody feels strongly about something.
 U.S.
Geothermal is working on (not surprisingly) turning geothermal resources
- or ultra-hot underground water - into electric power. Since the
energy source is renewable, and creates no waste, we can certainly add
UGTH to the list of companies we'll be following in our 'clean energy'
Macro
Trends/Micro Cap series of articles.
By the way,
UGTH has rewarded investors with an astounding 378% return over the last
two years...and it's still in its development stages.
This company
is fairly new to us, so we haven't done a lot of background work on it
yet. We'll add layers of details as we can though. If you have any other
insights or thoughts on U.S. Geothermal or other clean energy opportunities,
please let us know via e-mail or through the blog. To leave a comment on
the blog, just follow the directions at the bottom of this
blog entry.
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Updated: 9:18 am PST (17:18 GMT), January 5, 2009
