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A.J. Watkinson
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A.J cut his teeth while working for more than 12 years on the corporate side of the financial services industry in the suburbs of New York City. In addition, A.J. has successfully traded stocks, options and currencies as an independent trader since the late 90's. Eventually A.J. moved out of... More
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  • DARA- Penny Stocks To Watch

    Sometimes the best investments are penny stocks you've never heard of. And I'd be willing to bet there are quite a few under your radar- given the literally thousands upon thousands of penny stocks to buy!

    We're focusing on a penny stock to watch called DARA Bioscience (NASDAQ:DARA)…

    DARA is an oncology-related pharmaceutical company working to provide healthcare professionals a synergistic portfolio of medicines to help cancer patients adhere to their therapy and manage side effects arising from their cancer treatments.

    The stock saw a nice pop yesterday of more than 23%!

    So why the big move?

    Dara Bioscience just announced the U.S. Food and Drug Administration (FDA) has granted Orphan Drug Designation to KRN5500 for the parenteral treatment of painful, chronic, chemotherapy-induced peripheral neuropathy. KRN5500 is a novel, non-opioid, non-narcotic intravenous product currently in Phase 2 clinical development.

    Basically, this drug will give pain relief to some folks with a virtually untreatable level of pain that has resulted from aggressive chemotherapy. And the fact the FDA has allowed this drug Orphan Drug Designation will allow a much faster track for DARA to bring it to market!

    If you're not aware, an orphan drug is one that has been developed specifically to treat a rare medical condition. In the US it is easier to win marketing approval for an orphan drug than all others coming before FDA approval.

    Additionally, there may be other financial incentives, such as extended exclusivity periods which are intended to encourage the development of drugs which might otherwise lack profitability.

    That's going to mean faster relief for patients, and also a quicker return for investors… making it a win-win situation.

    DARA also holds exclusive U.S. marketing rights to Soltamox® (tamoxifen citrate) oral solution, which is the only liquid form of tamoxifen, used for the treatment of breast cancer.

    The latest news from DARA doesn't represent a new blockbuster "must have" drug with hopes of massive profit potential, but it does bode well that this little drug company may just turn a profit on their latest R&D sooner rather than later.

    And that's certainly makes for a penny stock to watch

    Keeping you one step ahead,

    A.J. Watkinson

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: DARA, Biotech
    Feb 26 1:26 AM | Link | Comment!
  • Bitcoin Revisited- Still A $250 Price Target

    In November last year I called for a collapse of Bitcoin pricing to $250 (see article here). While it never quite made it as low as $250- it did collapse from a high of $1163 (on November 30th ironically) to trade just seven days later at $542 (on December 7).

    That's a collapse of more than 50%! Far too risky for my taste, and I'm certain the taste of plenty of novice traders.

    But to those naysayers out there, fair enough- I missed my price target... I can own up to that.

    Now, after recent events at Bitcoin exchanges across the world, we may just see this price target become a reality. Actually, if events continue to unfold on their current pace- the concept of Bitcoin could become the single-largest financial fail of all time.

    If you're not in tune with the world of Bitcoins, let me fill you in.

    Last week Mt. Gox, one of the largest (and original) Bitcoin exchanges had to "temporarily" suspend withdrawals. The news led to a massive sell off amounting to a single-day drop in value of 20%!

    In my opinion, I think that was a rather controlled drop given the circumstances...

    Think about it- if your local bank decided to suspend all withdrawals of US Dollars you'd be outraged. But what if say Chase Bank, one of the largest banks in the country, decided to suspend withdrawals at ALL it's branches? We'd see MASS HYSTERIA!

    In my last article I pointed to one of my concerns with this new virtual currency. Here's what I said-

    "I simply can't get past the fact that Bitcoin was first made popular on a role-playing fantasy card trading website."

    I continued to tell you that Mt. Gox became the first and largest Bitcoin exchange quoting prices and keeping an active market. And sadly this site was found to be involved in some black market activity and assets belonging to the Mt. Gox exchange were seized, due to their relationship with the Silk Road drugs market.

    Fast forward to today-

    Nothing has changed. I ask a question to all Bitcoin investors out there in cyberspace,

    Since you're trading a virtual currency, who is regulating this currency? You're exchanging your cash into a currency that is not backed by the full faith and credit of the US government or any government for that matter. In fact, Indonesia has specifically banned the currency warning citizens

    "Bitcoin and other virtual currencies are neither currency nor legal payment tools in Indonesia. People are advised to be careful about Bitcoin and other virtual currencies"

    And it's not looking like Bitcoin exchanges can get themselves in a position to be regulated by the US.

    Last month, CNBC ran an article in which both Treasury Secretary Jack Lew, and Chase Bank CEO Jamie Diamon discussed the trouble with the entire Bitcoins concept...

    Jack Lew was quoted by CNBC saying,

    "From the government's perspective, we have to make sure [bitcoin] does not become an avenue to funding illegal activities or to funding activities that have malign purposes like terrorist activities"

    And Chase Bank's top exec told CNBC,

    "Bitcoin will eventually be made to follow the same standards as all other payment systems... That will probably be the end of them."

    To make matters worse, just yesterday multiple Bitcoin exchanges experienced "hacking" or attacks in the form of distributed denial of service attack. This is increasing the list of financial analysts that are warning off investors. And as each new site gets hacked, so grows the already negative cloud surrounding Bitcoin.

    Let me leave you with some food for thought that might just hopefully wake up some folks on the fence about leaving any real money in Bitcoins. The recent attacks on Bitcoin exchanges would be like terrorists attacking various branches of a massive bank, all in the same day. That is far from possible (welcome to the benefit of physical currency).

    In addition, Bitcoins exist in a world of bits and bytes- you can't spend them with the exception of a very small handful of active stores (online of course). You can't fold a Bitcoin in your pocket and go out to dinner. You can't pay your mortgage, car payment, or electric bill. It's not a real world currency.

    Finally, in my last article Bitcoin bulls mocked me for relating it to any type of standard investment. Well, if we follow that logic- it's not an investment that can be bought and sold based on fundamentals or technical patterns.

    So if it's not a currency, and it's not an investment... then what exactly is a Bitcoin?

    It's nothing more than a piece of code with no intrinsic value that has no shot of replacing all currencies. Bank on that!

    Bitcoin $250? I'm feeling more and more confident we'll see Bitcoin $0 before too long.

    And don't say I didn't tell you back in 2013 not to trust anything that's born on a fantasy role-playing card website. I'd take a penny stock over a Bitcoin any day!

    Keeping you one step ahead,

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Tags: forex
    Feb 13 10:31 AM | Link | Comment!
  • What's Going On With PLUG?

    For investors paying attention, 2014 hasn't been the start many have hoped for. We've watched the DJIA fall from 16,500 to just 15,800. That's a loss of 700 points, or roughly 3%.

    Obviously, there's nothing much to talk about when looking at a 3% move over the course of January. It takes a 10% pullback to even be called a correction.

    But when looking at Plug Power (NASDAQ:PLUG), you're probably curious about what's going on. This alternative energy penny stock has fallen more than 46% from its 52-week high! PLUG rallied to $4.90 on January 9th… just 13 trading days ago.

    Now, I don't care who you are, but a 46% collapse is massive. But in 13 trading days… what's going on?

    Before I get to that, let's make sure you know a bit about the company and why it's been in the news…

    PLUG - Plug Power

    Plug Power is an alternative energy technology company that designs, develops, and manufactures fuel cell systems for industrial markets (think forklift and other material handing vehicles).

    The company is doing a great job growing their customer base which includes some household names you'll recognize. Here are just a few of PLUG's customers-

    • Whole Foods
    • Firestone
    • FedEx
    • Mercedes Benz
    • Lowe's Home Improvement
    • Walmart
    • Stihl
    • P&G
    • Coca-Cola
    • Sysco
    • Ace Hardware
    • BMW
    • Kroger
    • Wegmans

    Now, let's take a look at the chart for this extremely volatile penny stock to see what's going on...

    Looking at this chart, you'd think there's been a negative announcement or an earnings miss. But to the contrary, the latest company news is all positive.

    In my last article, I informed you that Plug Power reported Q4 sales totaling $32 million. Since then, we've also learned that PLUG completed their recent equity offering taking in $28 million! Here's the excerpt from the filing I'd like you to focus on-

    "The shares and the warrants were sold together in a fixed combination, with each combination consisting of one share of common stock and 0.40 of a warrant to purchase one share of common stock, at a price to the public of $3.00 per fixed combination for gross proceeds of $30.0 million. The securities were placed with a single investor."

    I'd say that's a fair bit of conviction and a huge position for just one investor!

    Since then, there have been plenty of commentary articles attempting to stifle the recent rally in PLUG shares, or help revive it. What's interesting to note is none of these articles contains any hard evidence as to what the upcoming earnings report will tell us about the financial performance of PLUG. (aka- no one has a crystal ball)

    It's my belief that most of the selloff is due to short term profit-takers or fearful speculators bailing as the stock reverses. I only say that because the company has yet to release any real financial or product-product related news.

    Interestingly, there's a good chance the selling is due to a general slowdown in trading volume. Here's the table of this year's trading in PLUG:

    The average volume over this period is just 37.6 million shares a day. As you can see, trading volume has been well below this average. Except for January 16th, every day since the 10th has failed to meet or exceed this daily average.

    Now, it's a fairly well accepted belief that low volume tends to cause a stock price to float sideways, or drift minimally in either direction. But in the case of penny stocks, low volume can lead to the type of sell off we've seen- especially one this hotly debated among traders!

    Since we're absent company news or a fundamental catalyst, I'd recommend investors sit tight until we get the latest earnings report. That way, you can make an informed decision on how to proceed- long or short.

    Keeping you one step ahead,

    A.J. Watkinson

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Tags: PLUG
    Jan 29 11:15 AM | Link | 2 Comments
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