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April 30, 2009

Which Weighs More - a Ton of Coal, or a Ton of Gaseous CO2?

Filed under: — MicroCapPress Editor @ 8:04 am

How does the old riddle go? Which weighs more - a ton of feathers or a ton of bricks? The knee-jerk answer is that a ton of bricks has to be heavier than a ton of feathers…..since bricks are heavier than feathers. Given a couple of seconds to apply some logic to your answer though, obviously they weigh the same - a ton is a ton no matter what it’s made of.

One of our astute readers asked a similar question regarding some of the data he found in a recent press release….which weighs more - a ton of coal or a ton of CO2?

Specifically, he wondered how every pound of coal that’s burned emits somewhere between 2 and 3 pounds of carbon dioxide, as described by this snippet from China Energy’s announcement earlier this week:

“The energy recovery systems under these backlog orders, upon completion, are expected to generate nearly 174MW heat energy. This is equivalent to achieving a total annual saving of roughly 370,000 tons of coal (coal equivalent), which would otherwise be required to produce the same amount of power, and consequently the reduction of roughly 1,000,000 tons of carbon dioxide emissions from burning of that coal each year.“

The answer? A ‘ton’ of CO2 gas doesn’t actually weigh a ton. Technically gas has no weight, so for anyone to compare the weight of a solid to a gas is comparing apples to oranges (at best). However, scientifically speaking, CO2 gas can be said to have weight or the equivalent to weight….it’s just not the kind of weight you and I understand by putting on a scale.

So to answer the question “Which weighs more - a ton of coal or a ton of CO2?”, a ton of coal actually weighs more.

That’s the simplified, conceptual explanation; you may want to contact the company for a more scientific explanation.

If you’re less interested in math and more interested in China Energy Recovery’s (CGYV) investment potential, sign up for the free e-newsletter today. We’ll keep you in touch with how China Energy is turning science into profits.

March 5, 2009

China’s Market Looking Better and Better Every Day

Filed under: — MicroCapPress Editor @ 11:02 am

As the pain here in the United States continues to grow, with General Motors’ (GM) viability in question and February’s retail sales sinking again, it leaves more and more investors asking the question “Is there anywhere that’s safe to invest?”. While the editorial staff still adamantly contends there are plenty of rising U.S. stocks, finding them - and being able to keep them - has admittedly been though to do lately. Dire economic news and a seemingly out-of-touch government are pouring water into a sinking boat faster than the market can bail it out.

China, however, may be a different story. Oh, their economic boat is still taking on water, but at least their market is bailing water out of the boat faster than it’s getting put back in. If economic health really is the key to the market’s health, a little more exposure to China’s stocks could be a good thing.

Just to set the tone, a little compare-and-contrast is in order….

  • Last quarter, the United States’ GDP shrank at a rate of -6.2%, For the same quarter, China’s GDP ’shrank’ at an annualized growth rate of +6.8%. (It ’shrank’ because it had been growing as fast as 14% at one point in 2007.)
  • China’s 2009 budget deficit will be about 3% above their GDP. The United States deficit for 2009 is on pace to exceed GDP by about 12.3%.
  • China is planning a stimulus to their economy that’s a lot more potent than the United States’ stimulus. The proposed $586 billion stimulus China has been discussing is about 20% of their GDP. Every $1 trillion worth of stimulus for the United States is about 8% of GDP. Granted, the U.S. stimulus price is ever-changing (higher), and the Chinese stimulus is still in question. Even if China’s is shaved and the United States’ swells, they’re still doing more.
  • Year-to-date, China’s market is down 14.3%, while the U.S. market is down about 23.7%. Neither is ‘good’, but on a relative basis it sure seems like stocks have less of a bearish tide to overcome in China.
  • China’s exports fell 17% in January, which on the surface would appear to be a problem for a major exporter. However, imports sank by 40% in January. So, it seems to be more of a problem for other countries than it does China.

Just some food for thought.

As far as turning these facts into something ‘actionable’, there are plenty of Chinese ADRs available to U.S. investors. In fact, there’s a good chance you already own one of them…. China Energy Recovery (CGYV).

Almost all of the company’s business has been won in China, largely because that’s where all the demand has been mandated by the government. Though the latest round of stimulus money mentioned above isn’t necessarily targeting “green” initiatives, coupling the state’s new clean-energy requirements with lots of stimulus (expansion) spending still bodes will for China Energy Recovery. That may be why the stock has done so well over the last week, while the American market has not.

On that note, now may be a good time to wade into CGYV if you’re not already an owner, but would like to be.

The key levels we’re watching here for CGYV are still $2.00, and $2.20. If we can get above the first one, the market should be optimistic - the stock has had trouble there before. If we can get above $2.20, the market should be outright excited - it would mean new multi-week highs were being hit, and could inspire a breakout move. That’s a reason you’d want in beforehand though, not afterwards.

As it stands right now, CGYV’s bullish momentum is solid… seven days of mostly higher highs and higher lows. Volume has been decent behind the rebound, though not great yet.

The reason for the strength, however, is longer-lasting… we really do think China’s economic resiliency could make for some pretty rewarding Chinese stocks, available to you in the form of American Depository Receipts. China Energy Recovery would be a good one to start with, but we’ll see if we can find some other attractive ones while the U.S. is still cleaning up its mess. Stay tuned.

Don’t miss our recommendation of any Chinese stocks that are poised to benefit from the country’s economic resiliency. Sign up for the free newsletter today, and we’ll alert you of any official MicroCapPress.com stock trades. We find the opportunities and trends nobody else can.

February 24, 2009

China Energy Recovery Inc (CGYV) Featured at Renewable Energy World Site

Filed under: — MicroCapPress Editor @ 9:59 am

Odds are you heard a lot about Secretary of State Hillary Clinton’s recent trip to China. However, you may not have heard about a side trip she took while she was there…. a visit to one of China’s energy-efficient power plants. Though there never seems to be enough publicity when it comes to a theme you’ve invested in (i.e. China Energy Recovery and waste heat), this exposure was a relative victory - the waste heat opportunity was at least exposed to a few new investors who are hungry for anything that’s profitable right now.

It was the perfect set up for a recent article penned by China Energy Board Member Roger Ballentine … Clinton’s visit highlighted the benefit of waste heat recovery, and Ballentine’s article at www.renewableenergeworld.com pin-pointed exactly how investors could tap into the trend. In fact, we attribute most of Monday’s and today’s rally from CGYV shares to the article, as that’s when it first appeared at the website.

If you’re interested, you can check out his article “China Offers Tips on Using Energy More Efficiently” at the Renewable Energy World site. It probably won’t reveal any new ideas to those already familiar with the company, but in reading it, it’s easy to understand how newcomers could be excited enough to buy into the company, hence the recent rebound. It was a much-needed rebound too.

Despite the nice move, the stock has still been stagnant over the last four months. There have been plenty of ups and downs, but on a net basis, has gone nowhere since early November. In that light, CGYV still has some hurdles to work past before any investors need to get excessively excited. Some traders are watching the $2.00 mark as a line in the sand, while others say $2.20 needs to be cleared before the stock has broken out of its rut. A move above $2.20 would mean new multi-month highs are being hit.

Either way, Roger Ballentine’s article stopped last week’s bleeding. From here the bulls can at least attempt to recoup some of the recent pullback.

Would you like to be notified if China Energy Recovery (OTC:CGYV) breaks past $2.20 and is on its way to much higher levels? Just sign up for the free newsletter.

February 4, 2009

Spicy Pickle Franchising Inc. (OTC:SPKL) Up 47% Year-to-Date

Filed under: — MicroCapPress Editor @ 1:25 pm

Say whatever you want to about the way their growth plans were put on hold in 2008, but you can’t deny that somebody made some big money by owning Spicy Pickle Franchising Inc. (OTC:SPKL) shares since the end of last year. Those traders who stepped in at 17 cents over the course of the last days of 2008 are now sitting on a 47% gain, if they held onto those trades. If that wasn’t you, don’t worry - there may be more of the same in store.

Just to be clear, this is strictly a technical look. We haven’t heard from Spicy Pickle in a while, and what news we were getting was modest when we got it. However, technical analysis can still highlight some great trades, which may be the case now.

Specifically, we’ve witnessed a bullish cross of the 20 day moving average line (blue) and the 50 day moving average line (purple). More importantly, we’ve seen some pretty strong volume behind the recent gains. Though the shift in the underlying dynamic has been subtle, it’s also been more meaningful than most traders seem to be giving SPKL credit for.

In the very short run, SPKL may be a little overbought. We may see the stock slide all the way back down to 21 cents before support is found and the uptrend can be renewed. So, from that perspective, right now may not be the exact best time to get in. There’s no way of knowing for sure; the chart has just been a little too hot for most traders’ taste.

Either way, we’re pegging a near-term target of 35 cents. That’s the first Fibonacci line SPKL will meet if this rally does end up taking hold (that target has nothing to do with whether or not we see an intermim pullback). The next key retracement level is at 47 cents … the major one we’re eyeing. If you look closely, 47 cents was also a ceiling in September, so there’s something significant there that we may not want to mess with. A move from 25 cents to 47 cents isn’t anything to sneeze at though.

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January 14, 2009

China Energy on Course for Highest Volume Rally in Months

Filed under: — MicroCapPress Editor @ 11:48 am

Remember everything I said in this morning’s newsletter about how well-paced the bullish volume had been growing for micro cap stock China Energy Recovery (CGYV)? Yeah, well forget it. CGYV is probably going to post it’s highest volume day ever today. That’s good news though… it’s buying volume, and has pushed the stock all the way up to some important ceilings.

In the newsletter, we specifically mentioned key resistance levels at $2.09 (last week’s peak), and $2.25 (November’s peak). Getting past the first one would be encouraging, while getting past the latter one would effectively mean hitting levels that were new highs seen by an audience that wasn’t distracted by the market’s implosion. (We actually saw higher prices in September, but our coverage literally began on the day the market started to unravel…. not exactly an apples-to-apples comparison.)

While we’ll gloat a little about how this chart is shaping up per our prediction, we’ll also counter that by acknowledging that a bigger move higher is hardly a foregone conclusion; there’s still plenty of risk, as always. On the other hand, they say the trend is your friend until it’s not. Well, right now - and until further notice - the trend is being very friendly to CGYV’s previous buyers.

Though prospective owners would be getting on board at a riskier and higher level (we’re not even going to bother preaching the ‘hesitation’ sermon), from a risk/reward perspective an entry here could still be justified. Just keep a short leash on things if you’re not one of those owners with a wide profit cushion.

Start receiving FREE e-research on select small and micro cap stocks. Get in-depth research reports, comprehensive coverage, exclusive market commentary and more, just by becoming a MCP subscriber today! Look for the submission form at the top of the right-hand column.

January 5, 2009

Bulletin Board Stock China Energy (CGYV) On The Move

Filed under: — MicroCapPress Editor @ 8:27 am

For the majority of last week’s shortened trading, owners of bulletin board stock China Energy Recovery (CGYV) had plenty of reason to be excited - shares rallied from a close of $1.50 before Christmas to a peak of $2.09 by January 2nd. That’s a pretty big move (+39%), particularly when the holidays are inspiring vacation time. By the end of last Friday though, the air had been let out of the bubble… CGYV was back to $1.70, giving up most of the gain.

Nevertheless, the last several days have actually been pivotal - in a bullish way - for China Energy Recovery shareholders.

Despite the late selloff on Friday, the buying volume up until then had been growing quite a bit (by bulletin board stock standards anyway). And, CGYV did manage to hit its second-highest high in months with that peak of $2.09. While it would have been preferable to see CGYV just blast-off and hit $6.00, we have to give the stock a little wiggle room.

As we can see already today, the buyers are coming back to the table for more after Friday’s close at $1.70. China Energy shares are currently priced at $1.75, but traded as high as $1.80 in the earliest part of today’s trading session.

Bottom Line: Slowly but methodically, CGYV appears to be picking up steam. It may not be a bad time to add your first position, or add more to your current position. If this small cap pick blows through the previous high of $2.25 (made on November 17th), we may not see another retest like the one we saw on Friday.

Also, don’t forget we’re looking for revenues somewhere between $22 million and $24 million for their fiscal 2008. Plan on earnings around $1 million. For 2009, sales should be in the $40 million area, and earnings could fall in between $3 million and $4 million. By comparison, the current market cap of roughly $40 million underestimates 2009’s likely results.

Start receiving FREE e-research on select small and micro cap stocks. Get in-depth research reports, comprehensive coverage, exclusive market commentary and more, just by becoming a MCP subscriber today! Look for the submission form at the top of the right-hand column.

December 18, 2008

Bulletin Board Company China Energy Getting Mainstream-Media Attention

Filed under: — MicroCapPress Editor @ 8:08 am

Publicity is a funny thing - the more you get, the more you get. Maybe that’s why bulletin board company China Energy Recovery (CGYV) has been everywhere in the media over the last few days… attention gets attention. Here’s a quick breakdown of their most recent media appearances; we’ll end the list with a grand finale that we consider to be a monster-sized achievement… a national television broadcast feature.

If you’re really into alternative energy investing, you’ve probably heard of the site PowerAlternatives.com. Their focal point - obviously - is alternative energy. More important to us, however, is that China Energy board member Roger Ballentine was recently interviewed by the site. This is great exposure to a small-but-active crowd. To replay the interview (it’s in an MP3 format), go to the China Energy page at the Power Alternatives site.

Registration might be required to listen, but don’t worry - we registered and haven’t gotten one solicitation e-mail from them yet.

Speaking of online radio, Ballentine was also recently interviewed by Commodity Watch Radio. You can replay this one as well, as it’s also in an MP3 format. The cool part about the Commodity Watch Radio page where the China Energy interview is accessible is that it also includes an information sheet about the company. You can go to that page just by clicking here. (You may want to just for the info sheet; there are a couple of details in it that we’ve never discussed.)

Commodity Watch Radio has a bigger following than Power Alternatives does. But, both of those online radio outlets pale in comparison to the more recent publicity….

When’s the last time you saw a bulletin board company mentioned on national news TV? Probably never, but your answer is about to change to “just now”.

If you’re a fan of CNN (or the station’s website CNN.com), then you may have already seen the clip. If not, then here’s your chance to see the positive light that CNN put on China Energy’s waste-heat solution. This was the likely reason for yesterday’s pop. However, there should also be an echo-effect of interest. That’s good for shares, as it could draw in more buyers.

Anyway, here’s the China Energy clip from CNN.com. A short commercial plays first, and then the China Energy piece begins.

Needless to say, it hasn’t been a bad week for China Energy or its investors.

Start receiving FREE e-research on select small and micro cap stocks. Get in-depth research reports, comprehensive coverage, exclusive market commentary and more, just by becoming a MCP subscriber today! Look for the submission form at the top of the right-hand column.

November 26, 2008

Spicy Pickle (SPKL) Still Growing, First Drive-Thru Being Tested

Filed under: — MicroCapPress Editor @ 7:49 am

The real estate market’s contraction - having finally made its way into commercial real estate prices - has been nothing but a good thing for eager Spicy Pickle (SPKL) franchisees. Early in November a couple of new leases were signed, and another one was just signed this week for a new location in San Antonio … the Texas town’s first.

At a point in the real estate crisis’ timeline it seems like nobody wants anything to do with real estate, Spicy Pickle’s people realize this is an opportunity to find new locations at very reasonable prices. Rent and lease terms weren’t as tenant-friendly as they were a year ago, and they’ll probably not be as tenant-friendly a year from now. For those who are willing and able, getting prime real estate now is going to be highly-advantageous in the long run. So, Spicy Pickle is basically making lemonade out of the economy’s lemons.

The San Antonio store will be located near the University Square shopping center on DeZevala Road, and should be opening in early 2009. That’s not the only new thing we heard from Spicy Pickle though…

Canada’s Bread Garden Urban Cafes - a wholly-owned group of restaurants located in and around Vancouver - is moving their Cloverdale store to a location with a drive-thru. It will be the first drive through for any Bread Garden or Spicy Pickle. But, if it works out well, the company may entertain the idea of adding more of them in the future. CEO Marc Geman thinks the company may be able to compete with other quick-service restaurants not just with speed, but also with menu choices (and quality) not available at other drive-thrus.

Note that Spicy Pickle’s initial growth plan from late last year, which was on hold for a while, appears to be getting back on track.

Start receiving FREE e-research on select small and micro cap stocks. Get in-depth research reports, comprehensive coverage, exclusive market commentary and more, just by becoming a MCP subscriber today! Look for the submission form at the top of the right-hand column.

November 12, 2008

Japan’s Carbon Emissions Surge - Boy, Do They Need China Energa Recovery

Filed under: — MicroCapPress Editor @ 9:42 am

Perhaps you came across the news yesterday regarding Japan’s carbon emissions and greenhouse gas production last year? In a nutshell, carbon emissions were up 2.3%…a clear step in the wrong direction of reducing their output of carbon dioxide (CO2). All told, Japan produced 1.37 billion tons worth of CO2, or its equivalent, last year…a record they aren’t exactly proud of.

Japan voluntarily entered the Kyoto pact, which essentially limits the amount of pollution each pact participant is allowed to generate. And, the country’s government thought they could come in under their quota when the pact was first signed. In fact, they were fully expecting a decrease in carbon emissions, which they had managed to do the year before. However, an earthquake led to the shutdown of a key nuclear power plant (TEPCO), so the country fired up their coal power plants. Their CO2 output increased accordingly.

There’s still no word on when or if the nuclear plant will be operational again, so the reprised problem is also an indefinite one.

It’s worth mentioning that - in an effort to abide by the Kyoto pact - Japan is looking to push their carbon output levels to less than 1990’s levels by the end of 2012. That will require almost a 10% reduction of CO2 output every year until then though. So, it’s not unreasonable to think the goal is out of reach, considering the latest batch of data.

What’s this got to do with China Energy Recovery (CGYV)? Nothing, directly. Indirectly it has everything to do with China Energy Recovery.

Considering China Energy Recovery’s (or CER’s) specialty is making coal power cleaner and more efficient, Japan’s solution is a no-brainer… buy some of CER’s caps and boilers. The cost is a pittance compared to the benefit.

One discouraging announcement itself (like this one) doesn’t put money in CER’s pocket. And, just because the solution to the problem is clear doesn’t mean Japan is going to place an order for the equipment that clearly could solve the problem. However, the fact that the problem is so well defined - coupled with the fact that the pressure is on - certainly speaks to the kind of demand CER should enjoy over the next 3 to 5 years. See, Japan is hardly alone here….China’s got a similar challenge, as do many countries including the U.S. (which does not participate in the Kyoto pact).

Carbon emission restrictions are not going away, nor is coal power. One way or another, the world’s got to find a way to make them work together….which is precisely what CER does.

We’re generally not into this kind of ‘concept’ investing, since it doesn’t define a specific valuation. However, CER has provided a clear valuation along with a brilliant product/service concept. That’s why we remain so encouraged.

Start receiving FREE e-research on select small and micro cap stocks. Get in-depth research reports, comprehensive coverage, exclusive market commentary and more, just by becoming a MCP subscriber today! Look for the submission form at the top of the right-hand column.

October 15, 2008

Micro Cap Company Spicy Pickle (SPKL) Adds Another Profit Center

Filed under: — MicroCapPress Editor @ 8:25 am

You don’t have to actually go to Vancouver, Canada any longer if you were dead-set on trying the company’s newly acquired Bread Garden. Come 2009, you’ll be able to experience the restaurant if you have a layover or a plane change at Vancouver’s airport. The great part for the company is that you’ll be joining the 18 million other people who pass through Vancouver airport every year. That’s a lot of foot traffic.

There aren’t a lot of details yet, other than the square footage, location, and the estimated open date of what will be the twelfth Bread Garden. However, airport restaurants tend to do quite well. A unique concept like a Bread Garden Urban Cafe stands to do even better than average.

In the bigger picture, we find it more than a little interesting that this micro cap company has once again found a way to grow by expanding somewhere there’s not a painful recession. On the contrary - Vancouver is thriving. Presumably anybody traveling to, from, or through Vancouver is also doing reasonably well in terms of consumerism.

A game changer? We won’t go that far. There were already 11 Bread Gardens, and there were a total 53 restaurants in the Spicy Pickle (SPKL) family not counting the new one underway at the Vancouver airport. However, every company-owned unit can have a solid impact on the top and bottom line when it comes to a micro cap company like Spicy Pickle.

More specifically, every company-owned unit means much better (relative) cash flow, as there are less than 20 company-owned stores. The rest are franchises. And, owning a unit rather than franchising it gives the corporation a chance at stronger bottom-line earnings than a franchise might produce.

The stock itself remains a frustration, though we attribute the majority of its weakness to the bear market - not the company’s performance.

Start receiving FREE e-research on select small and micro cap stocks. Get in-depth research reports, comprehensive coverage, exclusive market commentary and more, just by becoming a MCP subscriber today! Look for the submission form at the top of the right-hand column.

China Energy Recovery (CGYV) Unfazed By Recession, Still Growing Revenues

Filed under: — MicroCapPress Editor @ 7:46 am

Recession? What recession? Bulletin board company China Energy Growth (CGYV) has done everything they said they would do since we picked the stock about a month ago. Though the market hasn’t cooperated yet in terms of the stock’s price, the company has certainly done their part.

In the middle of September, China Energy Recovery (CER) publicly said they were on pace to do $16 more million in business by the end of calendar 2008. That would mean total sales of $26 million for the fiscal year….and a 119% improvement on 2007’s total.

Since September, they’ve done nothing but validate their claim. We covered the news of their $3.2 million installation for Two Lions Fine Chemical Co. a couple of weeks ago. More recently, they collected $735K for a system installed at a Chinese paper mill. What was interesting about the paper mill installation, however, was that it not only improved the energy efficiency of the plant, but also prevented a great deal pollution. The system is capable of re-collecting up to 160 tons of the toxic by-product created when making paper. Some of it can be re-used, and the rest of it can be disposed of appropriately. Neither was being done very well before China Energy solved the problem.

The bigger observation is simply that CER is able to adapt their technology to meet a variety of needs. Though our focus (and theirs) has been energy efficiency through waste-heat recovery, there’s no less opportunity in pollution control. Perhaps we’ll be seeing more projects like this in the future, in addition to their heat recovery boiler systems. 

Start receiving FREE e-research on select small and micro cap stocks. Get in-depth research reports, comprehensive coverage, exclusive market commentary and more, just by becoming a MCP subscriber today! Look for the submission form at the top of the right-hand column.

October 8, 2008

Interesting Carbon Credit Prediction in MarketWatch Article

Filed under: — MicroCapPress Editor @ 10:25 pm

It was only a small mention in a relatively minor article found at MarketWatch.com, but Lily Donge was recently quoted saying she felt that no matter who won the Presidential election this year, a carbon-emissions cap and regulated trading of carbon credits would be introduced when Congress reconvened after the new Commander-in-Chief was in office. (By the way, Donge is the manager of environment and climate change at the ’socially responsible’ investment firm Calvert Group.)

There’s an implication for China Energy Recovery (CGYV) if Donge’s statement was accurate (and we believe it was).

A couple of weeks ago we were explaining how the sale of carbon emission credits was a sub-industry in itself for China’s industries, as the revenue it could generate was significant. China-based CGYV customer Two Lions Fine Chemical Co. sold $2.5 million worth of carbon credits thanks to a waste-heat recovery system that only cost them about $3.0 million…and they’ll be able to sell those credits year in, and year out.

However, that was in China, where a carbon cap system is in place. In the United States there is effectively (and surprisingly) no comparable system… yet. The clamoring for such a framework is growing though, and will likely become law in 2009. When it does, and when trading carbon credits is demonstrated not to be a free-for-all, we absolutely believe U.S. companies will start looking for ways to at least not exceed their carbon-output allotment. Furthermore, we expect these same companies to follow the lead of Two Lions and other factories, and sell their carbon credits for a profit.

Another industry expert quoted in the article specifically said waste-heat recovery was an interesting arena, and would benefit from Congress taking such an action.

The point is, the ideas we’ve been discussing regarding China Energy Recovery aren’t just ours - they’re being batted around more and more each day by the mainstream media. While the stock itself has been a frustration lately, it’s certainly not because the premise is faulty. Indeed, CGYV’s premise is ideal. Now we just need the broad market to cooperate.

Here’e MarketWatch.com’s alternative energy article.

Start receiving FREE e-research on select small and micro cap stocks. Get in-depth research reports, comprehensive coverage, exclusive market commentary and more, just by becoming a MCP subscriber today! Look for the submission form at the top of the right-hand column.

April 16, 2008

Micro Cap Company Spicy Pickle (SPKL) Shows Same-Store Growth

Filed under: — MicroCapPress Editor @ 1:04 pm

Being a fast-growing franchise, it can be tough to evaluate bulletin board company Spicy Pickle (SPKL). The challenge is distinguishing between expansion-based growth and the improvement of your existing revenue centers. To help investors figure it all out, sometimes a retailer or restaurant will publicize ’same store‘ sales. As a shareholder, even if the company never opened another unit, you’d still want to see evidence that growth was going to happen.

Just a few moments ago, Spicy Pickle announced their Q1 (2008) same-store revenue growth was just a hair under 5%. The sixteen stores they had up and running during Q1 of 2007 generated an average of 5% more sales in Q1 of 2008. Therefore, the corporation’s royalties were increased by the same percentage (they take their cut from the top line).

So what? The most important thing it demonstrates to us is simply proof of the concept. Growth is tough to come by in any environment, but it’s particularly impressive considering consumers went into hibernation mode during the first quarter of this year. If there was any doubt that the restaurants’ ‘fast and casual’ concept would fly, the revenue increase should alleviate the concern.

In short, the restaurant’s concept has been proven in the real world. Here’s the news release.

Start receiving FREE e-research on select small and micro cap stocks. Get in-depth research reports, comprehensive coverage, exclusive market commentary and more, just by becoming a MCP subscriber today! Look for the submission form at the top of the right-hand column.

April 4, 2008

Micro Cap Universal Delivery Solutions Group (UDSG) Now Delivering for Manhattan Subways

Filed under: — MicroCapPress Editor @ 12:36 pm

We knew this was in the works, but Universal Delivery Solutions (UDSG) started the weekend with some good news about delivering for Manhattan Subway sandwich shops.

The last we heard about the partnership was October of last year. If you missed the news, just click here for our entire coverage. Or, if you want the Q&D version, here goes…

All the Manhattan Subways can deliver subs, but handling it at the store level could be a logistical nightmare. To centralize and streamline the process, UDS Group has established one nationwide toll-free number to call in a delivery order. UDS handles all the logistics; all the local store has to do is make the sandwiches and tell the driver where to take them. For doing this, Universal Delivery Solutions takes percentage of the dollar amount of the order.

The ‘bigger picture’ plan is to reproduce the same one-phone-number setup, for other restaurants. Eventually, they could do the same for grocery stores, pharmacies, dry-cleaners…you name it.

Though the deal with the Manhattan Subways was deemed a pilot, that’s one high-profile trial program. It involves dozens of restaurants. Plus, it’s New York. If they can make it there, (and sorry for the cheesy cliché) they can make it anywhere.

If this Manhattan Subway arrangement works as well as we think it can, we anticipate the degree of interest in UDS Group’s offer to rapidly. To that end, just know there are nearly 1 million restaurants in North America. That’s a lot of potential partners.

February 14, 2008

Universal Delivery Solutions (UDSG) - A Trader’s Perspective

Filed under: — MicroCapPress Editor @ 1:30 pm

If you were waiting on micro cap Universal Delivery Solutions’ (UDSG) chart to start behaving better before jumping in, you might want to take notice of some recent developments. The stock pulled out of the funk it was in during Q4 of last year, and is trying to find a new, bullish groove. Chart watchers take note - there’s a whole lot to think about here; we’ll look at just some of it.

In late January, UDSG broke above its 50 day moving average line for the first time in a long time. That move also shattered what was becoming a fairly troubling resistance line. Nice, but better still was how shares found support there on the 11th, and pushed off the 50 day line on the 12th.

As it stands right now, that’s a higher high and higher low. Though a little ambiguous, it’s also a decent start to a recovery.

Some traders would look at the chart and suggest a move above the early-February peak of 6 cents would be even more bullish (and we’d agree). But, if you don’t know to watch for it between now and then, you may miss it when it happens.

As for the levels Universal Delivery Solutions is likely to start or stop, we’ve got Fibonacci lines to help us draw that map.

The short-term Fib lines don’t really tell us much. Spanning from the October peak of 8.8 cents to the January low of 2.7 cents, we don’t see any relationship to the most recent (February) highs and lows.

When we zoom out and use last June’s high of 12 cents as a peak, then the recent high of 6 cents starts to make a little more sense.

A 38.2% retracement of that pullback would put the stock at 6.3 cents…just a hair above where we were a few days ago. We think that line is still in play though. If-and-when we revisit it, be alert. If we happen to cross it, the next potential ceiling lies at 8.5 cents. That’s also the high water mark for Q3 of last year, so we wouldn’t take a stall there too lightly.

All the same, the current momentum seems to be favoring the bulls. There hasn’t been much supporting news from the company over the last few days, which is a bit uncharacteristic of UDS Group. However, they continue to work on upgrading from their pink sheet status to the OTC bulletin board exchange.

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January 24, 2008

Universal Delivery Group (UDSG) To Expand With Salad Creations

Filed under: — MicroCapPress Editor @ 7:51 am

This micro cap stock seems to become a little less micro every day. Universal Delivery Solutions (UDSG) announced this morning their partnership with Salad Creations would be expanding along with Salad Creations’ planned growth in 2008.

The relationship was forged in May of 2007, when Salad Creations asked Universal Delivery Solutions to handle delivery order processing for one store in Boca Raton, Florida. The test was expanded to Coral Springs and Weston in July of last year. Apparently things went well, since UDS Group will be on board for Salad Creations’ expansion into Texas and Maryland in 2008.

This is a pretty big deal for Universal Delivery for a couple of different reasons.

First, it validates the viability of such a service. Though the restaurant in this case - Salad Creations - is now going to be a nationwide name, the delivery logistics for all of those stores is to be handled with one call center, using just one national phone number. That’s a much more efficient way of handling phone-in and delivery orders. When other restaurant chains start to see the service in operation, they too may inquire about getting UDS Group involved in their own marketing plan.

The second reason this is a big deal for Universal Delivery Solutions is much more straight-forward…revenue. Salad Creations currently operates 34 units, which may well be their biggest single customer. However, Salad Creations intends to open more than 100 units in 2008. With Universal Delivery Solutions along for the ride, we suspect UDSG’s top and bottom lines are going to start making some significant progress.

As for the stock, owning UDSG wasn’t necessarily any easier to own than any other stock has been since late October. So, while lower, the fact that it held its ground relative to the market at least deserves acknowledgement.

What we found to be impressive - and bullish - was the price action over the last couple of days. The stock had been working on a recovery, but finally made good on the promise Wednesday with a strong move past some key resistance.

Though it might be a tad soon to say this is the beginning of better days, it wouldn’t be wrong to start considering the possibility. Remember, Universal Delivery Solutions is still working on getting their stock listed as a bulletin board equity. An upgrade like that could really be a boost for shares.

Here’s today’s press release.

 

 

December 19, 2007

UDS Group (UDSG) One Step Closer to Bulletin Board Listing

Filed under: — MicroCapPress Editor @ 7:23 am

Micro cap company UDS Group (UDSG) is officially 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 the SEC has two years worth of verified results, UDS can submit the appropriate application.

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 qualifies 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 could be finished and approved sooner than most people may realize; UDSG may be trading on the bulletin board by the beginning 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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November 14, 2007

Spicy Pickle (SPKL) - One More Open, Two More In The Oven, Plus Earnings

Filed under: — MicroCapPress Editor @ 6:48 am

Micro cap company Spicy Pickle (SPKL) continues to grow at a rapid pace, opening their 31st store last week, and signing leases for two more. The newly-opened one is the second one in Indianapolis, Indiana. A total of ten are on tap for the area. The two new leases were signed for pending stores in San Diego, California, and Austin, Texas. It’s the first store in San Diego, though twelve are on the way. It’s the third store in the Austin area.

As we’ve mentioned before, each store established in a new market is like a seedthe first one softens the ground, which means the following ones are well received. And in all cases so far, their popularity among consumers has had a positive ripple effect. We suspect this is the primary reason for such a brisk pace of growth right now.

Moreover, this early-stage company is why we feel SPKL is an early-stage investment opportunity. As more saturation occurs, the risk/reward dynamic of being a shareholder changes.

Speaking of shares, the pullback seems to have stabilized after a full 61.8% retracement of a historic run-up. Many traders would consider this a relatively safe ’second chance’ entry point, or perhaps a first chance for anyone waiting for all the early volatility to subside.

Additionally, the company reported quarterly earnings on Wednesday. No surprises really…the cost of ‘going public’ was built into the bottom line, making the loss seem substantial to anyone not reading the income statement closely. Those are one-time fees, and shouldn’t be a factor at all going forward.

Also, note that the company doesn’t book franchise fees until that store is open. Considering a significant number of stores were open after their reported quarter was completed, the ‘then’ doesn’t exactly reflect the ‘now’. More than that, the number of stores being opened right now is accelerating. We believe next quarter will be significantly stronger than this past quarter, and encourage you to focus on the future rather than the past for this micro cap stock.

Here’s the full press release on the store openings, while the quarterly fiscal information can be found right here.

October 23, 2007

Micro Cap Stock Spicy Pickle (SPKL) Opens Two More Stores

Filed under: — MicroCapPress Editor @ 6:37 am

The saga continues for this micro cap company - and its stock. Spicy Pickle (SPKL) announced Monday afternoon that two more stores had been opened during the prior week. Adding those two to the two opened the week before, the total number of units now up-and-running is 30. The company plans to have 10 more open by the end of this year, and 50 more franchise agreements beyond those 40 have already been signed.

One of the new stores is in Hattiesburg, Mississippi. The other is near Indianapolis, Indiana - in the Fishers suburb. In both cases it’s the first Spicy Pickle in the area, though not the last. Two more are slated for Hattiesburg, and nine more are planned for the Indianapolis area.

The Micro Cap Press research team believes these are key expansions - not just in numbers, but geographically. As new markets are penetrated, it becomes easier to establish a foothold in other new markets. Potential franchisees see the current rapid growth, and want to establish their restaurants before some other restaurateur claims a territory.

The food is being well received too, as evidenced by busy stores. Consumers tend to follow the crowd…and a buzz. Though it’s counter-intuitive, the longer the lines are, the longer the lines get. We suspect the ‘newness’ of the concept is going to sustain interest and growth with this micro cap company.

The stock? ‘Wow’ pretty much sums it up. The move from 69 cents a month ago to yesterday’s close of $1.88 may have exceeded anybody’s expectations. At this point, we’ve heard some traders are starting to lock in a short-term profit. Though the general consensus is that SPKL will eventually be worth $2.00, or more, as of right now, there are also a few shareholders taking advantage of a short-term overbought situation by selling their position and waiting to buy them back on a dip.

For the full news release, click here.

September 28, 2007

A ‘Spicy Pickle’ (SPKL) Seed Gets Planted

Filed under: — MicroCapPress Editor @ 7:34 am

Spicy Pickle (SPKL) has officially released their first bit of news as a bulletin board stock. Yesterday afternoon, we learned the company has signed a new Franchisee in Gainesville, Florida. It will be their first store in the state, and it should be open sometime in 2008. The company’s real estate selection team has begun the hunt for an ideal store site.

While one store may only be a drop in the bucket, with new restaurant concepts, one store can be like a seed. Once the seed takes root, branches start to sprout. We won’t be surprised to see a few more Spicy Pickle’s pop up in Florida shortly after this one goes up.

Also, if you haven’t had a chance to view the web film, we encourage you to do so. We know a lot of you can’t actually go and try the food (yet), so the presentation really gets you up close and personal with what this restaurant really is. More importantly, it can really explain what all the buzz is about within the investment community.

As far as trading is concerned, what’s not to like? On the Friday we released our profile, SPKL closed at 69 cents. As of right now (10:24 AM on the next Friday), it’s trading at 91 cents. That’s a 31.8% gain in about a week. Better still, the volume still seems to be matching the upward momentum, and we’re still seeing higher highs and higher lows. The amazing part? Based on our analysis, SPKL is still undervalued as an intermediate-term holding.

For the full news release, click here. To see the brief video, click on the image above.

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