![]() ![]() One big red flag is consistent insider selling from the CEO. NLST builds value-added hybrid DRAM/NAND storage for high-performance computing. With the declarations that memory has turned the corner, it seems to me that NLST could be in the same ecosystem as PureStorage ( PSTG). If NLST wins again, the stock should do extremely well. Now Hynix is appealing and the decision will be determined February 21. Netlist ( OTCQB:NLST) $0.30 - Attracted by the news flow, tiny NLST wins multiple patent rulings against memory juggernaut Hynix, good hiring of sales professionals. If you see that a name is really moving you can always add more to it if the news flow turns positive. Please don’t risk more than an expensive dinner or a day trip on any one name. In all cases but especially with these names you MUST do your own research and make your own decision. Below is my list, the price, and how they caught my attention. On the other hand, one of these names, hopefully, will gain a few hundred percent in appreciation. So please, don’t risk more than the equivalent of the change that has fallen into the cushions of your couch. Hopefully, I have laid the table for you and you understand that these are very risky names. Again the other side of this is nothing - no growth, no improvement, and bankruptcy. That said, the economic conditions have bought them time and improved their chances to return to solvency and even growth. Of course, the names below have individual problems and once they fix their problems their rallies will be independent of the current market movement. ![]() So my thinking is the small-cap names will continue with the rest of the market now, and may even outperform, especially when energy stocks finally break above their trading range. ![]() Until the last six to seven weeks, when the Russell woke up and is following the S&P 500. You pretty much see that the IWM has been chopping around in the same channel for most of the year. The Russell 2000 Small-Cap Index ETF ( IWM ) shows a step change, here. With all these factors, individual investors looking for leveraged opportunities and hedge funds looking for “catch-up” trades favors small-cap stocks. Low interest rates and fintech competing with banks have boosted lending to small and struggling businesses, and even consumers. Underlying all of this is persistently low interest rates and a low regulation environment. I see a similarity to airline ticket pricing, DRAM capacity and its relationship to capacity -quilibrium means better profitability. One might even be optimistic enough to believe that these E&P companies have found an equilibrium with global competitors. With Jobs plentiful and wages rising the uptick in gasoline prices will not dampen spending habits as much as in the past. As trade recedes into the background, oil prices are firming to the level where many if not most US frackers can make money. ![]() The US-China trade war has reached an armistice. Just this morning we learn that China is buying the most soy products in two years, and news that they arrested 107 mainland Chinese for counterfeiting a German adhesive product. The truth is there's a lot to be optimistic about. If the melt-up is real stock market sentiment should transition to a higher level of optimism. This is part of my Melt-up - Meltdown prediction. This is a topic that I will explore a bit more tomorrow, but I believe that the individual investor is returning to the market. If that happens you could see double, triple, quadruple and more returns (or zero). In this case, these are possibly broken companies that can hopefully be resurrected. You often hear about the value strategy being looking for broken stocks, not broken companies. That means you really have to understand the value proposition and understand what will turn around the underlying business. You also must hold these for a long time before or if you ever get the expected return. Truth be told there's a good chance that one of the names below are going to go bankrupt. Another moniker for these extreme-value names are “penny stocks.” As such, these are very risky names. This necessitates the notion that these stocks are generally involuntarily at low prices. Because by definition, they have operating leverage and losses that offer “carryforwards,” meaning that the losses accumulated in the past can now be used to shelter new earnings. ![]()
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