Playing Blowout Earnings (Again) with EnviroStar, Inc.

Sometimes the market provides investors with gifts—great entry points for stocks of up-and-coming companies which are flat-out performing and profitable. Right now, I believe that’s the case with EnviroStar, Inc., a “low-floater” that just reported blowout earnings, and whose share price should be in line for some nice gains ahead if you’re patient enough to stay the course. EnviroStar, Inc., through its wholly-owned subsidiary, Steiner-Atlantic Corp., distributes commercial and industrial laundry and dry cleaning equipment and steam and hot waters boilers manufactured by others, supplies replacement parts and accessories and provides maintenance services to its customers, and designs and plans laundry, dry cleaning and boiler systems to meet the layout, volume and budget needs of its diversified institutional, retail, industrial and commercial customers. The company, through its DRYCLEAN USA License Corp. wholly-owned indirect subsidiary, owns the global rights to the name DRYCLEAN USA, which the company franchises and licenses to retail drycleaners in the United States, the Caribbean and Latin America. I first put EnviroStar on my radar screen last September after the company issued a nice fiscal year earnings report, complete with a solid outlook going forward.  Revenues for fiscal 2013 were $36,226,584, an increase of 61.3% over the…

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Taking Stock – Following Up On Some OTC Winners

It’s been a rough and highly volatile start to 2014 for market players. That makes now an opportune time to look at the performance of some recent recommendations and close out some older OTC positions, as the “easy money” bull market days of 2013 appear to be coming to at least a temporary halt. Fusion Pharm (FSPM) This issue was one of two plays that appeared primed to benefit from the capital rush into marijuana stocks that accompanied Colorado’s legalization of the substance in January, and plans afoot in many other states to pass similar legislation. As hoped, FSPM shares raced all the way to and through the $8 mark after we wrote about the stock in early January when it was trading at $2.90 per share. Currently sitting at about $6 per share, I would reduce my position here by half, take the 100% return, and hold on to the rest in anticipation of ongoing sector strength. Endexx (EDXC) The second of two “pot stocks” we profiled in January, this company’s shares have also seen a nice jump from about $0.14 each, to a recent trading print of $0.21. I like the nice steady rise in EDXC’s price, along…

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Getting High (returns) With Colorado’s Legalization

I can’t think of any historical precedent for what’s happening with marijuana in the United States—when a formerly illegal substance with a massive built-in market becomes legal. Alcohol prohibition almost fits the bill, but alcohol was legal before prohibition. That being the case, it’s time to take a look at two pure play over-the-counter stocks that appear well-positioned to benefit from Colorado’s burgeoning marijuana industry: Fusion Pharm, Inc. (FSPM) and Endexx, Inc. (EDXC). Fusion Pharm, Inc. Based in Denver, Colorado, Fusion Pharm, Inc. manufactures and sells a patent pending commercial hydroponic cultivation system capable of growing almost any herb, vegetable, flower, fruit or terrestrial plant better and faster than traditional farming methods. The system is called the PharmPods hydroponic cultivation container system. The company sells and licenses its PharmPods containers to agricultural equipment distributers, urban farming companies and other specialty growers. In February 2013, the company completed the sale of 8 PharmPod High Intensity containers under its licensing agreement with Meadpoint Venture Partners. Unlike almost all other issues in the “pot sector,” Fusion Pharm features a razor-thin float of 5.7 million shares. With the current mania for marijuana stocks in full swing last week and this week, traders managed to…

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GLD

The Ghost of GLD Ghosts Past

A happy New Year to all. Let’s get straight to business. We’ll start with the golden delicious – what appears to be a bounce in the precious metals that has many people wondering if we’ve seen the bear’s bottom. On the bullish side, the chart shows the SPDR Gold Trust (NYSE:GLD), a decent proxy for the metal, moving higher over the last few sessions, and her Relative Strength Index (black circle, at bottom) ascending above its midway waterline. But beyond that, there’s little on offer that’s positive. We still have all the moving averages unfurled and trending lower, including the no-nonsense 137 DMA, which has proven itself an indomitable line of resistance for the last twelve months (in red). So even if the move has another five percent upside from here, we believe it will meet with a freight train’s worth of selling when it encounters the 137 DMA. Moreover, there’s absolutely nothing in the volume figures that would indicate we’ve seen a bottom (in blue). For the last six months we’ve seen declining volumes for GLD, precisely the opposite of what’s expected at a major market turn. MACD (at bottom, in black) has also yet to confirm RSI’s bump…

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