TFN eNews 09/23/2009: Will Q4 earnings boost this Chinese Proxy Stock tomorrow?
Published via e-mail broadcast on September 23, 2009
In today’s TFN eNews:
* This “Proxy Stock” is announcing earnings tomorrow
* A penny stock gamble on the grand U.S. judicial lottery
* And a heart-felt “thank you” from Laura Cadden
Dear TFN eNews reader,
One of our Hot Stock Confidential Chinese pharma “proxy” stocks is getting ready for some action. At least I hope so. You see, after taking 51% gains on the first half of our position in Tianyin Pharmaceutical, Inc., (NYSE:TPI) on September 3, I’ve been sitting on pins and needles, ready and willing to go and take a much higher gain on the second half.
If and when it materialized.
TPI is a manufacturer and supplier of modernized traditional Chinese medicine based in Chengdu. Now, unlike my father, I’m not a traditional medicine kind of guy. However, my sons have accused me of exuding “old people smell” for liberally applying Tiger Balm to sprained muscles and ligaments. But that’s it!
Nonetheless I’m extremely bullish on Chinese pharma companies and drug makers, both traditional and science-based. First, because China is pumping billions of dollars into its health system right now. (Beijing doesn’t bother mislabeling healthcare subsidies and welfare as “insurance reform.” They simply pour money into the system. American money, mostly, earned the hard way by competing in the global marketplace.)
Secondly, I believe that during the next leg of globalization, China will end up with an even bigger slice of the American pharmacy business: A recent agreement almost guarantees that this will happen… and be bankrolled by the American taxpayer. The entire Chinese pharma sector will benefit from this. Among them companies like TPI.
Now, TPI has hit 52-week highs at $4.37 in the last few days. My initial projection was “an expected gain of 90%-plus within the next 8 months”. We’re more than half-way there in just two months. TPI will hold a conference call tomorrow to discuss its fiscal 2009 Q4 and full-year results at 10:30 a.m. ET. We’ve seen some strong volume spikes over the last couple of days.
I’ve brought this up for discussion a few times in the TFN office. My expectations for this company are high… but I’d be tempted to use the next upward spike to close out the position at substantial gains.
*** Our resident invalid Laura Cadden wanted to thank all you kind souls reading the TFN eNews for your outpouring of support and well-wishes in response to her cancer surgery last Thursday:
“For those that have so kindly asked for an update, here’s a quick summary:
“I was delighted to find out yesterday that the surgery removed the full malignancy and the cancer has not reached my lymph nodes. Because I have what is known as an ER+, PR+, HER-2-neu+ type of cancer, and it’s known to be very aggressive, my treatment will most likely be chemo followed by radiation. (And suddenly, after the good news, I’m more than okay with that!)
“Thank you all for your kind messages.”
Incidentally, Laura’s Hot Stock Pick for today was a company that makes treatment products for cancer patients who aren’t as “lucky” as she.
“Timing is everything,” she wrote. “I think right now is the perfect time to invest!”
*** We received this briefing from Shannon Z., one of the members in our HSC Network. It’s a penny stock in the original meaning of the word. As such, it’s likely to gyrate wildly on any news coverage. With an average daily trading volume of just 45,000, I can’t recommend it — to our general readership. But because the story is compelling, I decided to pass it on without prejudice:
“If you look at Calypso Wireless Inc. (OTC:CLYW), they have a patented ‘ASNAP’ technology, which ‘allows you to switch and connect from either a cellular network or a WLAN, seamlessly without the user noticing the change. This means uninterrupted connectivity as you travel in and out of the range of WLAN access points. The use of ASNAP also increases the amount of available wireless bandwidth from the current state of technology of 9.6 kbps to 11 Mbps.’
“ASNAP enables the transfer of large files such as pictures, music and video between wireless devices faster than you can do them on your home computer. It also enables real-time mobile video conferencing capabilities, with friends and families anywhere in the world.”
“As a computer science major myself, this technology could be useful in many more aspects of our connected world. So why is CLYW sitting at two pennies a share, with only 190,000,000 shares outstanding? For one, it’s a developmental stage company. Calypso does not have that cash cow yet. They’re just beginning to market this technology. In addition, T-Mobile decided well after Calypso’s patent was approved to sell a similar technology. That would have brought in ‘hundreds of millions’ of dollars of revenue via license fees and royalties, according to Calypso’s CEO.
“In November 2008, Calypso filed a patent infringement complaint against T-Mobile (Case 2:08-cv-00441). If you actually read into the complaint, what T-Mobile is selling and bringing in hundreds of millions of dollars of revenue with is exactly the same thing the Calypso Patent covers and has covered for years before T-Mobile started selling it. It has almost been a year since the case was opened, but the longest I’ve recently seen these types of cases last is 3 years in my experience.
“There are hints that there may be some major movements with the case or Calypso’s future. One director, Williams David Holmes, keeps purchasing shares of the company at market value whenever it dips below $0.02. Just look up CLYW on www.insidercow.com. Usually his purchases boost the share back up to $0.02. So why has he recently purchased over $10k worth of a penny stock as a director of a company? Your guess is as good as mine, but I suggest you take advantage of any future dips and hold this one.
“If this case comes out in Calypso’s favor, you might end up seeing gains measured in thousands of percentage points. Just think: A positive outcome could push this from the $0.02 it currently stands at, to 2 bucks a share via license fees and back payments from T-Mobile. Just divide $200 million in potential revenues by the 190 million shares that Calypso has outstanding and a conservative estimate would be about a $1 a share if they win the case. That, my friend, would be far beyond a three bagger…
“But don’t take my word for it: Remember to do your due diligence and buy with caution any security if you decide to buy. This could be a dream come true — or a nightmare! So don’t invest more than you can lose in its entirety. I only put $5k in on this one in the last few days after the insider developments. Make sure you try and get this below $0.02 a share. It tends to dip pretty regularly below this point.”
As always with penny stocks: I love to take the credit if it works out. But don’t blame me if it doesn’t! Speculation on the big cash lottery of the American judicial system is not for everyone!
*** “The recent triple-digit surge of Strategic Hotels and Resorts (NYSE:BEE) proves the small-cap sector is red hot,” writes TFN’s resident market oracle Andrew Snyder today. “Take advantage of the action while it lasts!
“No doubt about it, t he small-cap sector is where the big money’s made these days. While blue chips try to figure out how to grow their top line in a high-unemployment economic environment, savvy niche players are making their investors rich.
“BEE is a perfect example. In the last five days alone, shares of the luxury hotel REIT have soared by over 100%. And since the March lows? Try stuffing 400% gains into your hat.
“While REITs are far from a typical small-cap play, we can get away with the classification simply because of the trust’s $200 million market cap. It’s a gross generalization that overlooks important fundamental aspects like debt and revenues, but it works… especially in this hype-driven, anti-fundamental market.
“So many investors these days are on a speculation-driven investing binge, buying based on price and industry. They see a $2.50 share price and make the trade. As much as this strategy flies in the face of everything I was ever taught or have taught, I can’t knock it. Right now, it works.
“After all, BEE investors are sitting on huge profits.
“While the action may be beneficial in the short-term, it’s also a sign of dangerous levels of confusion in the markets. After a nasty tailspin earlier this year, the Street is once again working to find accurate prices. It’s a tough game considering the lack of predictable data… and incredible levels of political intervention…”
Read on right here: http://www.todaysfinancialnews.com/investment-strategies/take-advantage-of-small-gap-gains-10053.html
*** With 63 winning picks open and shut this year, TFN’s Hot Stock Confidential is one of the top performing resources for investors!
“So glad I subscribed as I’ve been making money since I did!” — HSC Member Valerie W.
Come join the fun: http://www.todaysfinancialnews.com/HSC/PROXY/EHSCK801.html
Quote of the Day:
“Capitalism is an economic system characterized by private ownership and control over the means of production. The distribution of goods and services and their prices are mainly determined by competition in a free market. Under such a system the primary job of government is to protect private property, enforce contracts and ensure rule of law.”
– Walter Williams, Creators.com
Recommended Reading:
Detroit update: Finally some good news?
Is there no end to China’s buying spree?
The 3 Best Chinese Stocks Under $5!
Today’s Top 3 Financial News Stories:
Newsmax.com – Treasury Memo: Cap and Trade Would Devastate U.S. Industrial Base, Trigger Energy Rationing “President Obama’s cap-and-trade plan could deliver several blows to the U.S. economy, according to a Treasury Department memo that one observer described as ‘damning.’”
NPR.org — Who’s Looking At Natural Gas Now? Big Oil “In the energy world, Big Oil has long been the key player — with one notable exception: The natural gas business in the United States is dominated by small, independent companies. More than 80 percent of U.S. natural gas supplies are produced by companies with a market capitalization of less than $500 million. On average, these companies have only a dozen employees.”
Bloomberg.com — U.S. Stocks Fluctuate as Falling Commodities Offset Fed Bets “U.S. stocks fluctuated as declines in commodities tempered speculation the Federal Reserve will signal the economy is strengthening. The dollar traded at a one- year low against the euro, while oil, gold and copper retreated.”
Cordially yours,
J. Christoph Amberger
Executive Publisher, TodaysFinancialNews.com
Next Article: The Top Investing Strategy for 2009
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September 24th, 2009 at 9:29 am
Any comments now that earnings have been released?
September 24th, 2009 at 11:53 am
Check today’s TFN eNews… it will be uploaded here on the site in a sec.