RedChip's  Instablog

Lattice Incorporated (OTCBB: LTTC), a cloud-based provider of telecommunications services for the government and commercial markets, recently sold certain non-strategic assets related to its government services division for $1.2 million plus additional royalty provisions.

The divestiture of these assets erases $282,000 worth of debt, adds $0.7 million in cash, and removes contract renewal risk associated with the current budgeting climate in Washington. The sale also frees up LTTC to focus on its fast-growing communications business, which is driving solid sales growth and margin improvement for the Company. Revenue generated by the communications division increased 64.7% year-over-year to $7.5 million for fiscal 2012.

LTTC expects 70% YoY sales growth in 2013 due to increasing domestic and international demand for its secured communications services. The Company's new cloud-based service offering is expected to further drive sales growth. The system adds additional services to LTTC's current offerings with minimal upfront cost to the customer.

Shares of LTTC currently trade around $0.10, but the stock is poised to move much higher as the Company expands its service offerings and moves into new markets. RedChip has issued a $0.71 price target on the stock. Learn more about LTTC by watching our recent "Money Report" interview with CEO Paul Burgess.

Interested parties can also dial into the Company's first-quarter earnings conference call on Tuesday, May 14, 2013 at 2:00 p.m. ET (11:00 a.m. PT). Click here to view the dial-in information.

Disclosure: The subject security is a client of RedChip Companies, Inc. RedChip Companies, Inc., employees and affiliates may have positions and affect transactions in the securities or options of the issuers mentioned herein. For full financial disclosures for all RedChip clients, please visit http://www.redchip.com/disclosures.asp?src=rcv.

Profire Energy (OTCBB: PFIE), a leading provider of burner management systems (BMS) to oil and gas companies, released its financial outlook for fiscal 2014.

The Company expects revenues to increase 34.7% year-over-year to $22.5 million, and net income to increase 200% to $4.2 million for the fiscal year ending March 31, 2014. Management believes PFIE will continue to find and capitalize on new opportunities in the U.S. oil and gas market.

PFIE's strong historical revenue growth bodes well for the Company going forward. Between the fiscal years 2008 and 2012, annual revenues for the Company grew 269% from $4.3 million to $15.9 million. Since its inception in 2002, PFIE has grown from a small service company (delivering parts out of an old Buick) into the largest operator in the BMS space, servicing blue-chip multinationals such as ExxonMobil, Husky Oil, Devon Energy, Shell, and ConocoPhillips.

Current penetration for BMS technology in the U.S. is estimated at only 1% to 1.5% of a $2.5 billion to $6.7 billion overall market. With oil and gas operators increasingly focused on improving safety and efficiency, PFIE's technology fills a huge, unmet market need.

To learn more about PFIE, watch CFO Andrew Limpert's presentation from the recent RedChip Emerging Growth Showcase.

Disclosure: The subject security is a client of RedChip Companies, Inc. RedChip Companies, Inc., employees and affiliates may have positions and affect transactions in the securities or options of the issuers mentioned herein. For full financial disclosures for all RedChip clients, please visit http://www.redchip.com/disclosures.asp?src=rcv.

The human genome project has spawned a new generation of biotechs focused on diagnosing and treating cancer using genetic data in ways that allow scientists, laboratories, clinics, and hospitals to pinpoint the various subtypes of cancer more quickly and accurately than traditional methods such as pathology and morphology. Cancer diagnosis based on genetic analysis, extracting DNA from blood tissue, is a paradigm shift in healthcare. The end result is that healthcare providers can predict and recommend treatment programs that are far more accurate and effective than traditional methods, ultimately saving time, money and resources.

One can make a fortune following in the footsteps of wise and highly successful investors such as John Pappajohn, the billionaire investor who has made hundreds of millions investing early in biotechs that are at the front edge of new technologies. Cancer Genetics (OTCQB: CGIX) recently went public raising $7 million at less than a $50 million market cap. John Pappajohn believes that CGIX's genetically based cancer diagnostic products are so advanced that he sees a company whose future holds a billion dollar or greater market cap, if it is not bought out before then.

His analysis is based on several comparables, two of which I will mention here: Decode Genetics, in the same business as CGIX, with less than $5 million in revenue, was bought out by Amgen (NASDAQ: AMGN) for $415 million; Exact Sciences (NASDAQ: EXAS), with less than $5M in revenue, is trading at a $620 million market cap, over 150x sales. CGIX, with a little over $4 million in revenue, is trading at 11x sales. Few investors know the CGIX story. The stock is inefficient. Buy microcaps before they are efficient. That is how John Pappajohn made hundreds of millions of dollars.

Disclosure: The subject security is a client of RedChip Companies, Inc. RedChip Companies, Inc., employees and affiliates may have positions and affect transactions in the securities or options of the issuers mentioned herein. For full financial disclosures for all RedChip clients, please visit http://www.redchip.com/disclosures.asp?src=rcv.