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Small Stocks. Big Returns. The SmallCap Network is one of the web's leading small cap stock trading communities. While large caps tend to receive the majority of media attention, small and micro cap stocks as well as penny stocks can often offer the most potential for investment gains. The... More
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  • Yesterday's Most Popular Penny Stocks (and why): OCNF, CTIC, DPTR, YRCW 0 comments
    Aug 7, 2009 1:46 PM | about stocks: PARR-OLD, YRCW, CTIC, OCNF
    OceanFreight, Cell Therapeutics, Delta Petroleum, and YRC Worldwide were Thursday's most accumulated stocks. Here's what you need to know.
    Though the market closed in the red on Thursday, that didn't prevent a handful of penny stocks from being heavily accumulated. When investors see this kind of defiant action, it can pay to find out what's going on. For yesterday, those strangely-purchased stocks were OceanFreight, Inc. (NASDAQ:OCNF), Cell Therapeutics, Inc. (NASDAQ:CTIC), Delta Petroleum Corp. (DPTR), and YRC Worldwide Inc. (NASDAQ:YRCW). Here's a closer look at what's going on with each.

    Just like our other three penny stocks under review today, OceanFreight, Inc. (OCNF) actually closed lower on Thursday, but was still one of the most purchased (net) names. Basically, investors went value-fishing after the stock plunged from $1.79 to $1.27 on its earnings announcement, buying a lot of shares once the low was hit.

    OceanFreight lost $32.8 million, or $0.51 per share. That's what prompted the steep drop. On an operating basis though, OceanFreight actually made $300K, or 4 cents per share. That may have been what those few - but firm - buyers were considering.

    Or, perhaps OCNF buyers were still thinking about DryShips' results last quarter... the company actually beat expectations by 2 cents per share with earnings of 25 cents. If things are stable for DryShips, then it stands to reason that they'll eventually improve for OceanFreight as well. Make no mistake though ... any bet on these companies is a bet on an economic rebound.

    Cell Therapeutics, Inc. (CTIC) continues to work its way into the point of the wedge pointed out a few days ago. On Thursday, the strong buying came after CTIC fell towards the lower end of the range, pushing shares back up to their mid-point. There's not much room left in the triangle to work with.

    Nevertheless, there was a lot of net buying yesterday... late in the day.

    The prompt may have been (even if on a delayed reaction) how Cell Therapeutics decreased its net loss by 54% during the last quarter. It's a bit pointless to speak of though, as the company only has expenses right now - no real revenue. All they did was reduce research and operating costs.

    Our take is still the same - traders should follow the breakout from this wedge shape, whichever direction it takes. Investors (long only) should remain skeptical as almost all long-term hopes are riding on Pixantrone's FDA approval... and the drug already has a troubled history.

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    Trading for Delta Petroleum Corp. (DPTR) was anemic yesterday (not to mention bearish - it closed slightly lower), but a handful of small players did step into a Delta Petroleum. It doesn't suggest major institutional buying, but it does prompt one to question what those few investors were/are seeing in DPTR.

    Odds are that these traders are eying the penny stock's persistent attack on the resistance at the 200 day line. Shares have tried to breach that mark three times since May, and each time the stock comes closer to doing so.

    What's interesting here is that the buying came in the heels of fairly disappointing Q2 results. Revenue was down 72%, while production (volume of oil and gas sold) was down 8%. The market didn't seem to mind too much, which may have made it easier to buy the stock.

    Just to clarify how YRC Worldwide Inc. (YRCW) made the most-purchased penny stock list despite the fact that it closed lower (and volume wasn't sensational), there were a great number of high-volume (relatively) buy transactions that occurred at  the lows for the day. In fact, that's the case for all of our stocks today.

    In any case, we estimate it was bottom-fishing efforts.... YRCW hit new multi-year lows in early July.

    In short, the vultures (competition) are circling the YRC Worldwide carcass. The trucking company lost more than $300 million last quarter, with revenue falling by $1.0 billion on a year over year basis. It's just part of a shipping/trucking epidemic highlighted here at the Small Cap Network a few days ago.

    While strong buying is of interest, given the that yesterday's accumulation was only a drop in the bucket compared to heavy selling for months now, it shouldn't be interpreted as some sign of renewed life, You're also invited to review the recent op-ed on small cap trucking, as it highlights how YRC's woes are very real, and very big.

    If you'd like to know of any changes in our opinion of these four stocks (or if we officially recommend them as trades), be sure to sign up for free newsletter today. It's delivered 2 to 3 times per week.
    Stocks: PARR-OLD, YRCW, CTIC, OCNF
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