Three Hot Penny Stocks On The Move
There’s no question we’re living in an exciting time for penny stocks. The Russell 2000 is chugging higher in an uptrend that’s about to enter a phenomenal fifth year. And it seems the small-cap index is setting new all-time highs on almost a monthly basis.
For the year, the Russell is up more than 33%.
And since hitting a low of 422 in March 2009, the index has gained over 165%.
With small cap stocks rising nearly across the board, we’re seeing a good number of penny stocks generate huge gains every week. And last week was no exception. Let’s take a closer look now at three hot penny stocks from the past week: Zoom Technologies (ZOOM), Camtek (CAMT), and Document Security Systems (DSS)…
Zoom Technologies (NASDAQ: ZOOM)
This Chinese tech stock zoomed higher last week!
As you can see, ZOOM soared on Friday to a high of $8.30 before falling back to finish the week at $6.46. The move was good for a stunning 182% gain to the high from the prior week’s closing price of $2.94.
And despite a flurry of profit-taking, the stock closed out the week with a profit of 120%.
China-based Zoom Technologies is a distributor of wireless communications services and equipment in the US. It distributes T-Mobile products and services to about 100 exclusive T-Mobile retail stores and approximately 1,000 multi-carrier retail locations. The company also manages T-Mobile retail stores.
Why did the stock take off?
Last Wednesday evening, the company announced it is attempting to acquire Beijing Baifen Tonglian Information & Technology Co. (Baifen). That company is one of China’s leading providers of mobile advertising services.
ZOOM’s CEO, Mr. Lei Gu, had this to say about the deal…
“Baifen has a good business model with sustainable growth… enviable margins and a scalable business. We are truly excited for shareholders of Zoom. Baifen has a clear vision to maintain its position as a top player in the mobile advertising space.”
Now, ZOOM has given back a good chunk of last week’s gains so far this week. The heavy selling could mean the Street doesn’t like the proposed deal. However, it also could mean that the stock just got ahead of itself.
I suggest you put ZOOM on your watch list to keep an eye on it. I’d be interested to see if the acquisition goes through and what the combined company’s numbers will look like before I buy the stock.
Camtek (NASDAQ: CAMT)
CAMT had a crazy week!
The stock surged from $2.65 to a high of $6.43 before falling back to a close of $4.11 for the week. Despite being unable to hang on to a 143% gain at the high, CAMT managed to finish the week with an impressive gain of 55%.
Why were the shares so volatile?
The stock took off on Monday thanks to a positive article about the company. Among other things, the article pointed to a statement by management that Camtek plans to launch a 3D inkjet solder mask printer early next year.
The new product launch would be a huge step forward for the company.
According to management, this new technology would expand the company’s addressable market by an additional $600 to $700 million. That would be a significant development for Camtek, which generated just $79 million in revenue over the past 12 months.
However, management threw cold water on the euphoria the very next day.
On Tuesday, the company issued a statement intended to clarify its position on the 3D printing product. The company said…
“The first installation of the GreenJet System for evaluation in a customer’s manufacturing environment is expected to take place in the beginning of 2014 and, subject to the results, the Company expects the first commercial sales… to take place during 2014.”
There’s no question investors drove the stock up thinking the product would hit the market in early 2014. After the company’s clarifying statement, however, it became clear the product won’t be available for commercial sales until later in the year.
As such, a number of investors decided to book their profits rather than wait to see what happens.
With that said, if Camtek’s 3D printing technology is a success, the stock could really take off. This is definitely one penny stock that is worth a closer look and possibly adding to your portfolio.
Document Security Systems (NYSE: DSS)
DSS has been trending higher since hitting a low of $0.86 in mid-October. But last week, the stock took off like a rocket!
Take a look at the chart…
As you can see, the shares jumped from $1.41 to a high of $2.30 before closing out the week just off the high at $2.13. That move was good for a one-week gain of 51%. Not too shabby.
And the stock’s now up 129% from the October low.
Document Security Systems provides turnkey security solutions to corporations, governments, and financial institutions around the world. Their security programs are designed to defeat fraud and to protect brands and digital information from an expanding worldwide counterfeiting problem.
Why did DSS surge last week?
The stock soared after the company said it filed a patent infringement lawsuit on Wednesday against Apple (NASDAQ: AAPL). The suit claims Apple has infringed on two specific patents that disclose systems and methods of using low power wireless peripheral devices.
But here’s the key…
The suit alleges that Apple has used the patented technology in its Mac, iPhone, iPad, iPod Touch, and iPod Nano devices.
As you can imagine, investors piled into DSS thinking the company may be in line for a huge payday.
It’s not clear at this point just how valuable these claims truly are. But there’s no doubt the value is quite substantial as the devices listed above have generated tens of billions of dollars in sales for Apple.
Take a closer look at DSS for your own portfolio. At a current price of $1.97, the stock has upside potential of over 100% to the analysts’ price target of $4.00 per share.
Profitably Yours,
Robert Morris
Category: Penny Stocks
