It was only yesterday we discussed using institutional interest in the financial stocks as evidence of their impending recovery. Our early hints were provided by Warren Buffett - who bought Marmon Holdings for Berkshire Hathaway - and Martin Whitman, who bought whole slew of financial stocks….like Ambac Financial (ABK), MBIA Inc. (MBI), Forest City Enterprises (FCE-A), and S&L outfit FedFirst Financial (FFCO).

Well, you can put another piece of financial pie on Buffet’s plate. We learned just a few moments ago Berkshire Hathaway is buying NRG N.V….a reinsurance enterprise currently owned by ING Group (ING).

There’s really not a lot to say now that we haven’t already said, so we’ll just reiterate our take - some really smart money seems to have a really keen interest in the financial sector…a sector many people seem to think is still radioactive. Is it possible they see the value as well as the light at the end of the tunnel? Given the choice of following or not following Buffet’s lead, we have to side with him and his long history of success.

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.

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, and 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 (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) to play this macro trend without needing to become an expert on alternative energy.

Just for the record, no, 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.

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.

Small cap company Masimo Corporation (MASI) has pulled off the rarest of feats…the company’s stock is trading higher than August 8th’s IPO price. Issued at $17 per share, the current price of $40.75 means a 139% gain was reaped in just a few months. That kind of success - and how quickly it came - is pretty uncommon for new equity IPOs.

Masimo is a medical equipment maker. Specifically, they develop and market signal processing technologies for noninvasive monitoring of patient’s vital signs. And apparently, business is good - the company did $108 million in sales in 2005, $224 million in 2006, and have done $187 million for the first three quarters of 2007 (on pace to do $250 million). Oh yeah…did we mention they’re profitable?

While the momentum got our attention, a closer inspection reveals the ‘trade’ value of this name may be much better than its ‘investment’ value at the time. Why? Sales and profits are nice, but the stock trades at a price/sales of 9.1. For comparison, the average equipment maker’s P/S is 2.44.

With that in mind, we don’t think MASI’s uptrend has a lot of longevity left - unless they more than quadruple sales. If the stock can get right-sized with about - though we hate to see it happen - a 75% deflation, then Masimo would become an interesting long-term idea. In the meantime enjoy the ride; just be ready to get off in a hurry.

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.

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.

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.

This is the kind of potential breakout move we were talking about back on November 27th when we first looked at small cap company Patriot Scientific (PTSC). The company had made a couple of nice rallies on news that licensees had been added to the fold, which means revenue was booked. With more licensees on the way though, we expected to see more surges.

Sure enough, Patriot Scientific announced even more licensees on Thursday, Friday, and Monday. And, the stock shot up on the news. The current price of 74 cents is 23% higher than the 60 cent level we saw back in late November.

Obviously it’s too late to go back and step into a position now - PTSC pretty much jumps from one level to the next. The lesson to be learned here is simply that, sometimes, you just have to get into an opportunity specifically when it’s not moving. If the circumstances are right, the volatility will work in your favor.

In Patriot’s case, we see this chart as a start-and-stop sort of venture. Now that we’ve made a big move, odds are we’ll see a sideways trend here for a few days…enough to let traders catch up with things. As long as we find support around here, we suspect it will only be a short break before the next rally. The 20 day moving average line (blue) was the catalyst for this most recent burst.

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.