MYDX and NBEV - Admitting bad calls....

I haven't been shy about patting myself on the back here when I've written a bullish opinion on a stock that then goes on to make substantial gains.  I've had a number of successes.

The Bullish Calls

I first wrote about LAC.TO at $0.75 CDN and it is now trading for $1.06....I long ago took profits on that stock at lower prices than where its trading now, and when that happens I simply cry into the money I made.

http://www.avoidthebag.com/2016/04/lithium-americas-cup-and-handle-forming.html

EGT.V is one I wrote about at 14 Canadian pennies.  I bailed on it after doubling my money but its still trading up around 25 cents.

http://www.avoidthebag.com/2016/05/the-lure-of-clean-energy-eguana.html

HMPR, which is now trading as XBKS after a merger is one I'm particularly happy about, and while I have taken profits by selling some shares its one I continue to like and have maintained a position in.
It was trading at a split adjusted price of $18.10 when I first wrote about it here, now its at $26.50 after pulling back from as high as $30.

http://www.avoidthebag.com/2016/05/hampton-roads-bankshares-hmpr-great.html

RVX.TO is a stock I first wrote about here when it was trading around $1.30 CDN, its currently at $1.75 after getting up around $2.50 in October and is one I still continue to both like and hold, however fully ackowledging that it is extremely high risk in my view.

http://www.avoidthebag.com/2016/06/resverlogix-phase-iii-clinical-trial.html

ACU.V written about at .16 cents now at .185 is one I doubled down on when it fell to 10 cents.  I took some profits when I climbed up over 20 cents, but I still am maintaining a position and still think there's much more upside potential.

http://www.avoidthebag.com/2016/07/the-lure-of-green-energy-aurora-solar.html

In October I expressed a bullish opinion on RMHB when it was trading around .036 cents American. Now it has climbed to .092....it is another one where I'll have to cry into the money I made, bailing on it after a 50% profit.

http://www.avoidthebag.com/2016/10/hemp-infused-beverages-intriguing-idea.html

KUB.V has been a monster, I wrote about it in October as well when it was 2 cents...and now its settled in around 6 cents after trading as high as 7.5 pennies CDN.  Its one I continue to hold, in fact I just added to the position I started at 2.5 cents by buying more at 6 cents.

http://www.avoidthebag.com/2016/10/an-intriguing-penny-play-kubv-ukranian.html

Not too bad at all, and I'm leaving out more recent gainers like Emblem Corp.

Of course not all my calls were long plays.  I did express bearish views at times when I thought some stocks were bubbling up on nothing more than Promotion, News and Hype.

The Bearish Calls
I wrote a few bearish opinions on ZIOP starting last May when that stock was trading in and around $7 to $8 per share, now its sitting around $5.50

http://www.avoidthebag.com/2016/05/ziopharm-wall-street-sting.html

I did a couple posts on KTOV also in May when that stock was trading up around $6.60 per, now its fallen all the way to around $3.

http://www.avoidthebag.com/2016/05/ktov-what-just-happened.html

And then there's VUZI when it was up at $8.81 on its way to almost $10.  Now its fallen all the way back to $6.40

http://www.avoidthebag.com/2016/09/vuzix-time-machine-back-to-tech-bubble.html

And finally my very recent bearish thoughts on NF.CN from November when it was up around 25 Canadian pennies and on its way to being promoted to over 30 cents.  Its now trading for 11 or 12 cents and in my opinion on its way back to .02 cents eventually.

http://www.avoidthebag.com/2016/11/message-board-fun-and-games-with.html

But enough of the successful calls, I didn't get them all right last year and I am sure I will get some wrong in the future.  Two opinions I expressed were particularily bad, one long idea and one short.

MYDX is a company I wrote about this past November and one I took a position out in.  When I wrote about the PPS was trading for 2.2 cents, and I bought into at .0144 as revealed in the comments. Its most recent closing price was .0021 for a drop of over 80%.  Ouch!!!  Thankfully it was a small position, and I followed my own advice in that post and only risked money I could afford to lose.

http://www.avoidthebag.com/2016/11/mydx-another-way-to-play-marijuana-space.html

I will continue to hold MYDX (the symbol and company name are one and the same).  The company is forecasting profitability in the near future, I'm not going to hold my breath however.  A good recipe for going broke in my opinion is to believe the forward looking bullish outlooks on penny stocks. I've already booked some solid capital gains in 2017 and losses can come in handy at tax time, even if the dollar amount is small.

The bearish short opinion was expressed on NBEV, back when it was trading under the symbol ABRW.  I wrote about that stock in June of last year when it was trading up around $1.75 cents after already made a huge jump from as low as .20 cents in February and March.  Today its trading up around $4.20 and has been as high as $5.50

http://www.avoidthebag.com/2016/06/abrw-great-example-of-stock-promotion.html

My opinion on NBEV hasn't changed for the long term, but I have to admit I was wrong.  The ultimate arbiter in the market is price, and I thought NBEV had been pumped up near its limits in June, so I was incredibly wrong on that one as well.

When I get it right I'm not shy about sharing my success, but that means I have to take ownership of those views and opinions I get wrong too.  Some social media posters talk with extreme confidence when pumping and bashing stocks because they know sheep will follow strength, and admitting to past failures or the possibility that a call could be wrong, well that doesn't inspire confidence, and pumpers and bashers in my opinion (one that is often not humble) is that most are industry hacks.

Professional market players infest social media sites where stocks are discussed, that's opinion but for me its not up for debate.  The way I see things they are manipulators and bullies, trying to dominate the herd so as to shepherd the sheep into the stocks they're dumping, or out of the ones they want to accumulate.

I'll end this post here and wish everyone luck.  I will also once again cite those two maxims that I think are of critical importance to retail investors.  Firstly that nobody has ever gone broke from taking profits, and secondly that if you sell a stock and then see it continue climbing even higher, before buying back in cry into the money you made and think again about that first maxim.

Cheers.

Xenith Bankshares - (XBKS) Consolidating from a position of strength

I first wrote about a company that is now called Xenith Bankshares back on May 11th 2016 before it merged with and into Hampton Bankshares (HMPR).  

http://www.avoidthebag.com/2016/05/hampton-roads-bankshares-hmpr-great.html

Post merger holders of HMPR were not affected, the number of shares they owned after the merger were the same as before.  Holders of Xenith were given (if memory serves) 4.4 shares for each one share they held of the old XBKS.  Post merger the name for the combined company was changed to Xenith Bankshares and it resumed trading under Xenith's ticker symbol XBKS.

Clear as mud?

Back in May the shares were trading around $1.80, and today they're worth $2.50 as of the close on December 7th 2016.  That's almost a 40% gain in just over 6 months, so not too shabby.  Of course that pales in comparison to many hyped up, speculative companies. But then it also hasn't been the roller coaster ride you often see with those riskier plays..

Not a bad looking chart, covering the period from when I first wrote about it on this blog to the present, but enough patting myself on the back.  

Shareholders recently approved a share consolidation which will take effect on Tuesday December 13th with every 10 shares being converted into 1 post consolidation:

http://finance.yahoo.com/news/xenith-bankshares-inc-announces-reverse-211604435.html

There can be different reasons for a company to enact a share consolidation, some good and some bad.  Often when its a company listed on a more senior exchange like the NYSE or Nasdaq a reverse split is employed to bring a company's stock back in compliance with the rules of the exchange.  

You see it all the time with stocks trading for less than a dollar over a protracted period of time. Exchanges like the Nasdaq have a minimum bid price requirement of $1.00 so a stock trading for less than that will often consolidate to lift their share price.  However at $2.50 that obviously isn't the issue for Xenith Bankshares.

Other times a penny stock will do a reverse so that the stock can be uplisted off the OTC markets and onto a more senior exchange like the Nasdaq.  A couple of stocks I've written about here have gone that route, SBOT and VUZI specifically with consolidations of 10 and 75 to 1 respectively.

Obviously though neither of those two rationales apply to Xenith.  They don't need to maintain compliance and they're not seeking to move off the Over The Counter market.  So one might reasonably ask: "Why bother"?

I can think of a few reasons.  At $2.50 (or thereabouts) per share XBKS qualifies as a penny stock in many eyes, there are investors who view any stock trading under $5 to be a penny play.  With positive earnings of $0.77 for the trailing twelve months according to WSJ.COM and a piddly little PE ratio of just 3.23 as per the same site, it doesn't look like the markets are showing XBKS much love or respect. 

With a 1 for 10 consolidation the PPS will be up around $25 per share assuming the PPS maintains its current level.  I believe that they will then have the chance to attract more serious investors, those who shy away from stocks they view as Penny Plays.

I can also envision XBKS attracting more institutional interest, although with current institutional ownership at over 56% they're already doing well in that regard.  Short interest will not be affected directly, current up to November 15th 2016 the number of shares shorted was 1.94 million, not even 2% of the float.  Those shorted shares will also consolidate post consolidation, bringing the number down to about 194,000.  

As I've written before on my other posts about Xenith/Hampton I believe the biggest potential catalyst comes with a return to paying dividends.  If they can start paying shareholders in regular distributions I can see their PE ratio climbing to something more in line with the standard in the banking sector, somewhere around 20.  

One last thing to take into consideration is the fact that this consolidation will result in "odd lot" holdings for any shareholders who own shares in increments of 100.  For every 1,000 shares held before the reverse, they will become 100 shares post consolidation.  However 100 shares will become 10.  This could be important depending on an individual investor's time horizon and level of investment experience in my opinion.

Someone holding 500 shares pre-consolidation will have 50 after the split, and 50 is what is called an "odd lot".  If someone goes to sell an odd lot (anything not in 100 share blocks) their order goes to the back of the line so to speak.  

Its something to consider for those who will end up with shares numbering in the tens instead of hundreds, or thousands.

That's it, I'm a shareholder so view my commentary in that light and verify all the information provided.  While I would not willingly post false information I am human and am more than capable of making an error.  Comments are always welcome and good luck.  

Reshuffling the deck - The dangers of marrying a stock

Opportunities come up every day on the stock markets.  Right now I bet there is a 1 cent stock poised to go to a dime, a 10 cent stock primed to hit a buck and a $1 stock that will be trading for more than $10 before too long.

Of course unless you have a bottomless bag of money at your disposal, then you're going to have to sell some stocks to take advantage of opportunities that arise, and hopefully you'll be taking profits. That's something I've been doing of late with a number of the stocks that I've written about here at Avoid The Bag.  

As disclosed yesterday (Oct 24, 2016) I closed out my position in Lithium Americas (LAC.TO) for a nice capital gain.  I also decided to reduce my position in Eguana (EGT.V) by half, realizing a 100% profit on the shares I sold, having bought them at 15 cents.  Xenith Bankshares (XBKS) is another I reduced by about one third, having a cost basis of $1.60 means a return in excess of 40% on the shares I sold.  With all those capital gains I also booked a capital loss on LED Medical (LMD.V), a penny stock I thought was a good prospect to get some attention, but it didn't pan out, at least not yet.

In my younger days selling would have been harder, but I've learned some valuable lessons over the years, both from my late great Father, as well as from a most invaluable teacher called Experience.

Too often I find investors fall head over heels in love with their stocks, and all too often just one. Putting all your eggs, as well as all your money, in just one basket is not only incredibly risky, its also incredibly stupid in my opinion, but people do it all the time.  Why?  Because they've fallen in love. Its something that's happened to me before, and something I try to avoid now.  

I still like EGT and XBKS which is why I didn't sell out entirely.  I'm still holding some LMD.V as well in hopes it will start to attract the attention of investors.  The only stock I sold off completely is LAC, although I still think they have a chance to make a go of their Lithium Mine with SQM's backing.  

So what are the opportunities I saw?  One is in another stock that trades in what I'll call the "New Energy" space.  Ideal Power Inc. trades on the Nasdaq with the symbol IPWR. Beside recent developments and potential for stocks in the Energy Storage market, I love the way the chart looks.

I'll be doing a specific blog post on Ideal Power in the days to come.

Good luck to all three of my loyal blog dawgs, and I hope you're making money....not just on paper though, but with real capital gains that come from turning shares into money.

Cheers.

HMPR - Golden Cross

I'm not one to draw my hand into a fist and start pounding the table about any stock, its not my style. But if I was forced to pick one stock to pump, then HMPR would be the one I would choose.

Are there other stocks out there that will make bigger gains in the near term?  Oh yeah, much bigger...but most (and possibly all) will be in money losing companies playing the Promotion & Hype game to lure investors in on rosy projections about the future.  

If you've been watching the markets for any length of time you've seen it happen, and maybe you've been caught in one or more yourself. They soar, investors load up as they climb, convinced they're gonna be rich....then BAM, the bag closes and the PPS collapses.  Sometimes it takes a few months, sometimes a few weeks, and still other times its just a matter of days.  

HMPR doesn't qualify as that type of investment for me, because they aren't paying cheeseball promoters to interview the CEO, nor are they being hyped by email blasting chop shops and twitter morons trying to pass themselves off as stock experts.

Hampton Roads Bankshares is, (as the name implies) a bank, and it is profitable.  

If you like a company that puts out a news release for any and every little event....then move along, you won't like HMPR.  That's not to say there isn't news, just not the usual fluff you see so often with speculative money losing companies.  Hampton Roads Bankshares has a proposed merger with Xenith Bankshares that is expected to receive shareholder approval on July 29th. 

http://finance.yahoo.com/news/hampton-roads-bankshares-inc-xenith-212500712.html 

Perhaps in anticipation of that news the stock has gone on a bit of a run.  I've written about Hampton before, back on May 11th when the PPS was $1.81:

http://www.avoidthebag.com/2016/05/hampton-roads-bankshares-hmpr-great.html  

It closed Wednesday July 27th 2016 at $1.98 and now the chart shows the 50 day moving average poised to cross over the 200.  Followers of Technical Analysis (or TA for short) refer to this as a "Golden Cross", when a faster moving average crosses over a slower one.  And for devotees of TA the "goldenest" of golden crosses is the 50 over 200.

Full disclosure to my devoted blog dogs, (yes all three of you) I am a shareholder so my opinions are not without bias.  And while I believe HMPR is a solid "buy and hold" long term investment....I could be wrong.  Do your own DD and don't hesitate to consult with a licensed professional.  

HMPR hardly gets any chatter on places like twitter and stocktwits, this is not some speculative money losing company being hyped and promoted like its the greatest investment vehicle of all time and a sure fire winner.  If you want a stock like that sign up with some email blasting chop shop.