(NEW YORK)--As the US midterm election approaches in early November, there are several stocks and sectors that could be effected by the pending results.
First on the radar is online gaming. PokerTek, Inc. (NASDAQ: PTEK), a developer of electronic poker-related products for use in the gaming and amusement markets, could benefit from a possible move to push the current House bill HR2267 through a 'lame duck' session after the election in early November. It is more then likely that the US House of Representatives will fall into control of the Republicans, but Democrats may attempt to push through the stalled bill into the more gaming friendly Senate for consideration in early 2011.
As states and local officials scramble to find new sources of tax revenue, the prospects for a relaxation on regulations for online gaming may find some hope in the more libertarian Tea Party agenda. In addition, a victory for Sen. Harry Reid (D - NV) could bode well for the gaming industry as a whole as the state looks to develop jobs in their all important gaming industry.
PTEK currently has only around 15 million shares outstanding, with a tight float of around 7 million. The Company recently announced that for the third quarter revenues had increased, gross margins continued to expand and their operating cash flow was in the black for the first time in Company history.
The Company is expected to release third quarter financial results before the bell on Nov. 2, 2010.
California Proposition 19
Another sector that may be effected by the upcoming election is the popular Marijuana stock sector, including Cannabis Science, Inc. (OTC: CBIS), a US biotech company developing pharmaceutical cannabis products.
As polls show Democratic Governor candidate Jerry Brown and Sen. Barbara Boxer (D - CA) now pulling ahead in the polls, the prospects of an increased democrat turn-out could push California's Prop 19 in the yes column. Prop 19 would make it legal, in the state, for the possession and cultivation of small amounts of marijuana for personal use. Through new legalization and regulation the state would also benefit from the increased tax revenue generated from this new industry.
This could have a sharp effect for marijuana stocks, such as Cannabis Scientific, and the prospects for increased legislation in other states across the country. Polls currently show Prop 19 leading in the yes column, but it could still be too close to call at this time. But again, with the new poll data showing a lean towards the democratic side of the ballot, the prospects for Prop 19 passing have surely increased.
CBIS recently announced plans to develop a FDA Investigative New Drug Applications (NDA) for its cannabis clinical trials.
Other stocks in the marijuana sector are Marijuana, Inc. (OTC: PCIO), International Merchant Advisors, Inc. (OTC: IMAI), and Converted Organics (NASDAQ: COIN).
For now, traders have their radars focused on the upcoming midterm elections, and how certain stocks may or may not benefit from the results next Tuesday.
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Tuesday, October 26, 2010
Sunday, October 24, 2010
Potential US China Trade War Could Support Rare Earth Prices
(NEW YORK)--A negative ruling late Friday in the WTO against Chinese steel pipe imports, and unanimous approval in the ITC for tariffs on Chinese coated paper, could be the begin of a potential tit-for-tat trade skirmish between two of the worlds largest economic superpowers.
On Friday, Oct. 22, the WTO ruled in favor of the US to impose duties on Chinese imports of steel pipes that are being dumped or subsidized into the US market. The specific duties that China had challenged involved circular welded pipe, light-walled rectangular pipe and tube, off-road tires and laminated woven sacks.
In addition to the action taking by the WTO, the U.S. International Trade Commission (ITC) also approved late Friday in a 6-0 vote to impose punitive duties on China exports of specialty paper to the United States. China has called the duties protectionist, while US lawmakers and makers of steel, paper and textiles say they are crucial to countering what they call unfair trade practices. The panel’s decision sets the stage for the tariff rates to take effect within days.
These actions come on the heels of a US probe of China subsidies for their clean energy market, which in turn drew a sharp rebuke from the Chinese government. China’s top energy official, Zhang Guobao, said the probe was misguided and based on a desire by politicians to garner votes. “I was very much astonished at it, wondering what the United States wants,” he said last Sunday, according to state-run media.
In retaliation, reports emerged this week that China has been delaying or blocking shipments of rare earth elements to Western nations in the US, Japan, and EU. Rare earth elements are used in the production for a wide-range of tech products, such as hybrid cars, mobile phones, flat-screen televisions, fiber-optic cables, and latest-generation wind turbines.
"Rare earths are a commodity. Each country has the right to decide how much it exports or imports. This is normal economic behavior," the People's Daily said.
Tom Bustamante, the Managing Director of Ludlow Capital commented, "Although a full trade war is very unlikely between both countries, the recent developments over the past week have now increased the possibility of China striking back with their own trade tariffs and restrictions on US, and Western goods. This is turn now increases the potential that the rumored delays and halts of 'rare earth. materials are surely going to be put in place after these events."
"China is flexing their new found economic muscle, and the pressure for them to appreciate their currency will also box China into a corner where they may push back. The ruling from the WTO late Friday may also encourage some other US industries to go forward with their own petitions as this recent WTO ruling clarifies the law and reduces the potential cost of litigation. It's a bit worrisome, as protectionism was one of the main causes for the prolonged effect of the Great Depression, but we're also seeing a growth of what you could call economic nationalization, not just of industries, but resources as well. This in turn could provide additional price support for rare earth commodities. Hopefully cooler heads will prevail, because a trade war now would be in no ones best interest."
Price for Chinese rare earth producers have run-up strongly recently due to these developments, but in an opinion letter to their members the company saw an better entry point into this sector after a nearly 30% pullback from recent highs, and the potential for retaliatory actions from China to provide support for these commodities.
Chinese Rare Earth Plays
Some of the biggest performers within the sector are China Shen Zhou Mining & Resources, Inc. (SHZ), China Direct Industries (CDII), Qiao Xing Universal Resources, Inc (XING), and China Gengsheng Minerals (CHGS). These stocks have been performing spectacularly over the past few trading sessions, but now they may be getting ahead of themselves on a valuation bases.
http://www.wallstreetnewscast.com/news/2010/october/chinaearth.html
On Friday, Oct. 22, the WTO ruled in favor of the US to impose duties on Chinese imports of steel pipes that are being dumped or subsidized into the US market. The specific duties that China had challenged involved circular welded pipe, light-walled rectangular pipe and tube, off-road tires and laminated woven sacks.
In addition to the action taking by the WTO, the U.S. International Trade Commission (ITC) also approved late Friday in a 6-0 vote to impose punitive duties on China exports of specialty paper to the United States. China has called the duties protectionist, while US lawmakers and makers of steel, paper and textiles say they are crucial to countering what they call unfair trade practices. The panel’s decision sets the stage for the tariff rates to take effect within days.
These actions come on the heels of a US probe of China subsidies for their clean energy market, which in turn drew a sharp rebuke from the Chinese government. China’s top energy official, Zhang Guobao, said the probe was misguided and based on a desire by politicians to garner votes. “I was very much astonished at it, wondering what the United States wants,” he said last Sunday, according to state-run media.
In retaliation, reports emerged this week that China has been delaying or blocking shipments of rare earth elements to Western nations in the US, Japan, and EU. Rare earth elements are used in the production for a wide-range of tech products, such as hybrid cars, mobile phones, flat-screen televisions, fiber-optic cables, and latest-generation wind turbines.
"Rare earths are a commodity. Each country has the right to decide how much it exports or imports. This is normal economic behavior," the People's Daily said.
Tom Bustamante, the Managing Director of Ludlow Capital commented, "Although a full trade war is very unlikely between both countries, the recent developments over the past week have now increased the possibility of China striking back with their own trade tariffs and restrictions on US, and Western goods. This is turn now increases the potential that the rumored delays and halts of 'rare earth. materials are surely going to be put in place after these events."
"China is flexing their new found economic muscle, and the pressure for them to appreciate their currency will also box China into a corner where they may push back. The ruling from the WTO late Friday may also encourage some other US industries to go forward with their own petitions as this recent WTO ruling clarifies the law and reduces the potential cost of litigation. It's a bit worrisome, as protectionism was one of the main causes for the prolonged effect of the Great Depression, but we're also seeing a growth of what you could call economic nationalization, not just of industries, but resources as well. This in turn could provide additional price support for rare earth commodities. Hopefully cooler heads will prevail, because a trade war now would be in no ones best interest."
Price for Chinese rare earth producers have run-up strongly recently due to these developments, but in an opinion letter to their members the company saw an better entry point into this sector after a nearly 30% pullback from recent highs, and the potential for retaliatory actions from China to provide support for these commodities.
Chinese Rare Earth Plays
Some of the biggest performers within the sector are China Shen Zhou Mining & Resources, Inc. (SHZ), China Direct Industries (CDII), Qiao Xing Universal Resources, Inc (XING), and China Gengsheng Minerals (CHGS). These stocks have been performing spectacularly over the past few trading sessions, but now they may be getting ahead of themselves on a valuation bases.
http://www.wallstreetnewscast.com/news/2010/october/chinaearth.html
Wednesday, October 20, 2010
China Rare Earth Element Stocks Trading at Rich Valuation Levels
(NEW YORK)--Rare Earth element Chinese stocks have been showing strong performance since China announced it was holding off shipments of these industrial minerals over the past weekend, but have they moved too far too fast.
Some of the biggest performers within the sector are China Shen Zhou Mining & Resources, Inc. (SHZ), China Direct Industries (CDII), and Qiao Xing Universal Resources, Inc (XING). These stocks have been performing spectacularly over the past few trading sessions, but now they may be getting ahead of themselves on a valuation bases.
For example, SHZ has a market capitalization of around $115 million, and is currently trading around 2.86 times book value. A pretty rich market cap for a company with only around $6 million in revenue, and total cash per share of just $0.02.
But, on the other hand, you are dealing with a potential embargo from China, one of the world's largest producers of rare earth elements. This story could unfold well into the 2011 as the Obama Administration continues to put pressure on the Chinese government for more fair trading practices.
This could be a play well into the end of the 2010 trading session, but for new investors looking to partake in this story it may be prudent to hold off at these levels. Most of these stocks are currently trading well above fundamentals, and technical analysis on the charts are indicating a potential sharp pullback in the sector within the next few trading sessions.
After any pullback, the rare earth element stocks and China's effect on this market, could be just the start of a monster trade as a potential trade-battle between the West and China starts to unwind. That, in itself, would send these issues to unimaginable valuation levels in the coming months.
http://www.wallstreetnewscast.com/news/2010/october/chinaearth.html
Some of the biggest performers within the sector are China Shen Zhou Mining & Resources, Inc. (SHZ), China Direct Industries (CDII), and Qiao Xing Universal Resources, Inc (XING). These stocks have been performing spectacularly over the past few trading sessions, but now they may be getting ahead of themselves on a valuation bases.
For example, SHZ has a market capitalization of around $115 million, and is currently trading around 2.86 times book value. A pretty rich market cap for a company with only around $6 million in revenue, and total cash per share of just $0.02.
But, on the other hand, you are dealing with a potential embargo from China, one of the world's largest producers of rare earth elements. This story could unfold well into the 2011 as the Obama Administration continues to put pressure on the Chinese government for more fair trading practices.
This could be a play well into the end of the 2010 trading session, but for new investors looking to partake in this story it may be prudent to hold off at these levels. Most of these stocks are currently trading well above fundamentals, and technical analysis on the charts are indicating a potential sharp pullback in the sector within the next few trading sessions.
After any pullback, the rare earth element stocks and China's effect on this market, could be just the start of a monster trade as a potential trade-battle between the West and China starts to unwind. That, in itself, would send these issues to unimaginable valuation levels in the coming months.
http://www.wallstreetnewscast.com/news/2010/october/chinaearth.html
Tuesday, October 19, 2010
Ludlow Capital Issues Alert on Coverted Organics (COIN)
(NEW YORK)--Oct. 19, 2010--Ludlow Capital, and equity research firm based in new York's Financial District, issued a traders alert for Converted Organics, Inc. (NASD:COIN), with a near-term target of $1.00+.
Coverted Organics announced today that it has eliminated $43.6 million of outstanding debt, liabilities, and future obligations through a restructing with Oppenheimer Rochester National Municipals and Oppenheimer New Jersey Municipal Fund. This move now makes COIN debt free and should add $9 million in cash for the company in 2011, and $600,000 immediately to their balance sheet.
This restructing now clears the way for the closing of the acquisition of TerraSphere Systems, LLC, a vertical crop grow system, and further development of other industrial wastewater business and growth of their profitable organic fertilizer business in California.
Now debt free, the company can focus on developing their TerraSphere acquisition, and benefit from their profitable organic fertilizer operations in California. Based on recent activity in companies who may benefit from the upcoming Prop 19, which would make growing marijuana for personal home grown use legal, and the elimination of all their debt, we anticipate the common shares could make a run for and above the $1.00 mark in the near-term. Until more details of further acquisitions, and upcoming earnings and guidance, we are withholding any specific price target at this time. But, based on these facts, COIN could now be looked at in a brand new light.
COINW are warrants that trade against the common shares. They expire on Oct. 14, 2014, are non-callable, and have a strike price of $1.30 per share. These warrants are currently trading at around $0.11 per share, with volume of around 130,000.
Coverted Organics announced today that it has eliminated $43.6 million of outstanding debt, liabilities, and future obligations through a restructing with Oppenheimer Rochester National Municipals and Oppenheimer New Jersey Municipal Fund. This move now makes COIN debt free and should add $9 million in cash for the company in 2011, and $600,000 immediately to their balance sheet.
This restructing now clears the way for the closing of the acquisition of TerraSphere Systems, LLC, a vertical crop grow system, and further development of other industrial wastewater business and growth of their profitable organic fertilizer business in California.
Now debt free, the company can focus on developing their TerraSphere acquisition, and benefit from their profitable organic fertilizer operations in California. Based on recent activity in companies who may benefit from the upcoming Prop 19, which would make growing marijuana for personal home grown use legal, and the elimination of all their debt, we anticipate the common shares could make a run for and above the $1.00 mark in the near-term. Until more details of further acquisitions, and upcoming earnings and guidance, we are withholding any specific price target at this time. But, based on these facts, COIN could now be looked at in a brand new light.
COINW are warrants that trade against the common shares. They expire on Oct. 14, 2014, are non-callable, and have a strike price of $1.30 per share. These warrants are currently trading at around $0.11 per share, with volume of around 130,000.
Monday, October 18, 2010
COIN a NASDAQ Listed Marijuana Play
(NEW YORK)--Oct. 18, 2010--In case you haven't noticed, Marijuana stocks have been showing increased interest as California's Prop 19 heads to the polls for the upcoming election.
Coverted organics (NASD:COIN), (www.convertedorganics.com) is dedicated to producing high-quality, all-natural, organic soil amendment and fertilizer products through food waste recycling. The Company uses its proprietary High Temperature Liquid Composting (HTLC) system, a proven, state-of-the-art microbial digestion technology, to process various biodegradable food wastes into dry pellet and liquid concentrate organic fertilizers that help grow healthier food and improve environmental quality. Converted Organics sells and distributes its environmentally-friendly fertilizer products in the retail, professional turf management, and agribusiness markets.
In addition to selling organic fertilizer for home-grown use, the company also acquired TerraSphere Systems (www.terraspheresystems.com), which provides hydroponic and grow room solutions for mass produce growers.
The stock is a small-cap NASDAQ pennystock, but if you are looking for a Marijuana play for the upcoming election, but wish something trading on a larger exchange, you may want to give COIN a look as a possible play.
Included to the common shares, which trade under the symbol COIN, the company also has a publicly trade warrant against the company, which trades under the symbol COINW. The warrant grants the buyer the right to puchase COIN common shares at a price of around $1.30, are non-callable, and don't expire for several years.
If you are looking for something with a bit more risk/reward, then you may want to give a look at some Marijuana micro-cap stocks such as Cannabis Science, Inc. (CBIS), MARIJUANA, INC. (PCIO), Medical Marijuana, Inc. (MJNA), Cannabis Medical Solutions, Inc. (CMSI), and International Merchant Advisors, Inc. (IMAI)
Coverted organics (NASD:COIN), (www.convertedorganics.com) is dedicated to producing high-quality, all-natural, organic soil amendment and fertilizer products through food waste recycling. The Company uses its proprietary High Temperature Liquid Composting (HTLC) system, a proven, state-of-the-art microbial digestion technology, to process various biodegradable food wastes into dry pellet and liquid concentrate organic fertilizers that help grow healthier food and improve environmental quality. Converted Organics sells and distributes its environmentally-friendly fertilizer products in the retail, professional turf management, and agribusiness markets.
In addition to selling organic fertilizer for home-grown use, the company also acquired TerraSphere Systems (www.terraspheresystems.com), which provides hydroponic and grow room solutions for mass produce growers.
The stock is a small-cap NASDAQ pennystock, but if you are looking for a Marijuana play for the upcoming election, but wish something trading on a larger exchange, you may want to give COIN a look as a possible play.
Included to the common shares, which trade under the symbol COIN, the company also has a publicly trade warrant against the company, which trades under the symbol COINW. The warrant grants the buyer the right to puchase COIN common shares at a price of around $1.30, are non-callable, and don't expire for several years.
If you are looking for something with a bit more risk/reward, then you may want to give a look at some Marijuana micro-cap stocks such as Cannabis Science, Inc. (CBIS), MARIJUANA, INC. (PCIO), Medical Marijuana, Inc. (MJNA), Cannabis Medical Solutions, Inc. (CMSI), and International Merchant Advisors, Inc. (IMAI)
Friday, October 08, 2010
Ludlow Capital Issues USA Technologies (USAT) $2.00 to $2.50 Target
(NEW YORK)--Ludlow Capital, and New York based equity research firm, issued an upgrade to USA Technologies (NASD: USAT), a developer of cashless payment vending machine technology, with a near-term target of $2.00 to $2.50 per share.
The growth in customers, and cashless transactions may now be positioning USAT on what the company itself calls a 'tipping point' in regards to the growth and use of their ePort Connect Service. For the quarter ending September 30, 2010, the Company reported that it had processed a record 14 million in transactions for a total of $24.5 million for their customers, which represents an increase in transactions of 89% over the same period 2009.
In addition, the Company reported 1,200 customers now connected to its ePort Connect Service, up from 1050 on June 30, 2010, or around a 12% to 15% increase from just a few months ago.
As more and more people become comfortable with using cashless means to pay for such products as vending machines products, the company should see continued sharp growth going into the 2011. The use of credit and debt cards for payments from younger demographics is only growing, such as in college dorms or military barricks. The ability to purchase snacks and other products through cashless means has very strong growth potential, which should allow USAT to gain more of that market share well into 2012.
The company projects being EBITA positive by end of quarter Dec 31, 2010, which will mark a major milestone for the USA Technologies. The Company has very little long-term debt ($730k), with around $7 million in cash in the bank as of the end of the June 2010 quarter.
The Company is expected to release their earnings for the quarter ending Sept 30, 2010 on or before Nov. 12th, which in our opinion could see the stock already trading in the $2.00 to $2.50 price range.
In addition to the common shares, which trade under the symbol USAT on the NASDAQ, the company also has preferred shares which trade under the symbol USATP, and warrants with a strike price of $1.13 which trade under the symbol USATZ.
Ludlow Capital began coverage on USAT on October 7, 2010 at a price of $1.10 per share.
http://www.wallstreetnewscast.com/news/2010/october/usat.html
The growth in customers, and cashless transactions may now be positioning USAT on what the company itself calls a 'tipping point' in regards to the growth and use of their ePort Connect Service. For the quarter ending September 30, 2010, the Company reported that it had processed a record 14 million in transactions for a total of $24.5 million for their customers, which represents an increase in transactions of 89% over the same period 2009.
In addition, the Company reported 1,200 customers now connected to its ePort Connect Service, up from 1050 on June 30, 2010, or around a 12% to 15% increase from just a few months ago.
As more and more people become comfortable with using cashless means to pay for such products as vending machines products, the company should see continued sharp growth going into the 2011. The use of credit and debt cards for payments from younger demographics is only growing, such as in college dorms or military barricks. The ability to purchase snacks and other products through cashless means has very strong growth potential, which should allow USAT to gain more of that market share well into 2012.
The company projects being EBITA positive by end of quarter Dec 31, 2010, which will mark a major milestone for the USA Technologies. The Company has very little long-term debt ($730k), with around $7 million in cash in the bank as of the end of the June 2010 quarter.
The Company is expected to release their earnings for the quarter ending Sept 30, 2010 on or before Nov. 12th, which in our opinion could see the stock already trading in the $2.00 to $2.50 price range.
In addition to the common shares, which trade under the symbol USAT on the NASDAQ, the company also has preferred shares which trade under the symbol USATP, and warrants with a strike price of $1.13 which trade under the symbol USATZ.
Ludlow Capital began coverage on USAT on October 7, 2010 at a price of $1.10 per share.
http://www.wallstreetnewscast.com/news/2010/october/usat.html
Tuesday, October 05, 2010
Ludlow Capital Upgrades TerreStar (TSTR) to $1.00+ Per Share
(NEW YORK)--Oct. 5, 2010-Ludlow Capital, a New York based equity research firm, upgraded TerreStar Corporation (NASD:TSTR) to a new range of $1.00 to $1.50 per share.
In their note, they referred to the upcoming partnership between Microsoft and AT&T and their planned launch of the Windows Phone 7 OS. This move could be Microsofts real push to enter the smartphone market, and with AT&T and T-Mobile as their partners, TerreStar could see benefits from their satellite feature on new upcoming Windows based phones with AT&T.
Both Microsoft and AT&T are expected to make this major announcement next Monday, Oct. 11th in New York City. During that time, the executive team of TerreStar is also expected to be in the city for upcoming investor conference.
In addition, there could be an announcement before the holiday season regarding a consumer based product using the TerreStar system.
With these unfolding events, and increased prospects financially for the company, Ludlow foresees a new trading scope for the stock above its 200 day moving average in the $1.00 to $1.50 price range.
In their note, they referred to the upcoming partnership between Microsoft and AT&T and their planned launch of the Windows Phone 7 OS. This move could be Microsofts real push to enter the smartphone market, and with AT&T and T-Mobile as their partners, TerreStar could see benefits from their satellite feature on new upcoming Windows based phones with AT&T.
Both Microsoft and AT&T are expected to make this major announcement next Monday, Oct. 11th in New York City. During that time, the executive team of TerreStar is also expected to be in the city for upcoming investor conference.
In addition, there could be an announcement before the holiday season regarding a consumer based product using the TerreStar system.
With these unfolding events, and increased prospects financially for the company, Ludlow foresees a new trading scope for the stock above its 200 day moving average in the $1.00 to $1.50 price range.
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