They typically arrive unsolicted in your email, under screaming headlines such as: “Could Go All the Way!” or “Gained 50 Percent, More to Come!!” or “Don’t Miss This!” They are emails from the likes of Stock Hunter, Liquid Pennies, The Bull Exchange, HeroStocks.com, just to name a few. It seems almost superfluous to suggest “buyer beware” because it’s hard to believe rational investors would actually make buying decisions based on this campaign style.
But buyers are certainly out there, judging by the volumes many of the subject stocks can generate. Perhaps they are just day traders, jumping in and out with some sort of profit, or the promoting firms themselves trying to generate activity. All we know is that they continue to proliferate, so somebody somewhere must be making money at this game.
We thought we’d follow a few recently featured micro-cap stocks from such email campaigns and see what happens to them over the next few months. We are not making judgements on the value of these companies or the tactics. But we are curious about how such promotions can possibly impact long term trading and valuation.
Here are 5 stocks that arrived in our email, selected randomly:
Montreal-based Solo International Inc. (OTC: SLIO, http://www.solointernationalinc.com) has been putting out regular headlines throughout January, but it’s a new enough company that Yahoo on Jan. 27 still carried the profile of a previous iteration based in Poland. It’s apparently a development stage rare earth exploration and mining company with all properties still in exploration and located in Quebec. A press release from The Bull Report was disseminated Jan. 26 with the headline “Rare earths as good as gold!!! My new pick is SLIO, so get ready! Its stock closed Jan. 31 at 16 cents, up two cents for the day on nearly 89,000 shares traded. By the close of market Feb. 10 the stock was trading at 11 cents. Market cap is $43 million.
New Port Richey, FL-based TBSS International (OTC: TBSS.OB, http://www.tbssinternational.com) arrived in email Jan. 23 via Stock Hunter US, Stock Brain and Liquid Pennies headlined “News Out! Mass production of new ultra-efficient lighting starts today!” According to Yahoo, the company was formerly known as Avenue South Ltd but changed to TBSS last October. The Yahoo profile says it provides construction services and also produces neon lighting. TBSS had a huge day Jan. 23 with nearly 5.8 million shares traded. It started the week at 10 cents, ran up to 16 cents briefly Jan. 23 and closed out the month Jan. 31 at 9 cents on more than 423,000 shares traded. By the close of market Feb. 10 the stock was priced at 5 cents. Market cap is $7.7 million.
Chandler, AZ-based Ecoland International (OTCBB: ECIT.OB, http://www.ecolandguano.com) is apparently in the bat guano business mostly overseas. But press releases say it has a subsidiary, D&R Technology, that is “one of America’s fastest growing applied robotics companies” and works with major automotive suppliers. By mid-day Jan. 27 it had already traded 2.4 million shares. It closed out the month Jan. 31 at $1.08, up 25 cents on the day and a whopping 6.6 million shares traded. By the close of market Feb. 10 the stock was priced at 81 cents. down 9 cents with 1.5 million shares traded. Not bad for a company that opened Tuesday, Jan. 24 at 27 cents.
Penn Yan, NY- (or Orlando, FL-) based GreenCell Inc (OTCBB: GCLL.OB, http://www.greencellinc.com) is a development stage company that seems to have to headquarters. Its press releases say Penn Yan, NY but a recent research report by Market Advisors suggests the company is based in Orlando. According to its press releases, GreenCell “is engaged in a joint venture with SenCer Inc. to develop, commercialize and market SenCer’s UltraTemp ceramic composite materials for Home and Transportation applications.” Last November 2 the company announced that it has “Entered the World of Nano-Techology.” It closed out January 31 at 53 cents, no change on the day. By the close of market Feb. 10 the stock was priced at 50 cents, down 1 cent on the day. Average daily trading volume was 110,700 shares. Market cap is $16.4 million.
Mission Viejo, CA-based Aperture Health (apre.pk, http://www.flexscan.com) is a healthcare and information services company, according to Yahoo. It offers a corporate health and wellness program. Founded in 2001, it was formerly known as FlexSCAN Inc. The stock closed out January at 38 cents, down 9 cents on the day. Volume was 527,087 on a day when the stock was touted by Liquid Pennies and HeroStocks.com. By the end of the trading day Feb. 10 the stock was priced at 22 cents, down 2 cents on the day. Trading volume that day was 81,039.