TPS Position Update – January 16, 2013
January 16, 2013
. . . . Unwired Planet (NASDAQ: UPIP) – Hold
UPIP is the stock that’s been in our portfolio the longest. It’s had its up and downs over the months, but we’ve always felt there’s a lot of potential with the company – otherwise we wouldn’t have held it this long.
Some of our patience is paying off as UPIP recently exploded higher… and, more importantly, is once again a profitable trade for us.
Here’s the deal…
UPIP is acquiring 2,185 patents from Ericsson.
These patents will help add to the company’s already impressive patent portfolio focused on wireless technologies. Plus, UPIP will receive 100 additional patents each year from 2014 to 2018.
Not only did the news cause investors to gobble up shares in UPIP (up 42% on the day of the announcement), but it also earned the company a stock upgrade.
We still are very optimistic about the future of Unwired Planet. Keep holding your shares for bigger gains ahead.
. . . . Cereplast (OTCQB: CERP) – Hold
We’ve gotten a few questions about CERP, so let’s shed some light on the company. It’s a complex situation and we wanted to be sure to get the facts straight before making a recommendation.
Bottom line, it’s not pretty.
Basically, in December, the company voluntarily delisted from the NASDAQ and is now traded over the counter. Management didn’t want to go through a reverse split and dilute the shares.
That’s a respectable approach, however the stock plunged on the news. Many investors won’t or can’t hold shares if they’re not traded on a major exchange.
Still, we felt it was a temporary setback, especially since the company announced the commercialization of one of their products soon after delisting.
After all, that’s what we’ve been waiting for – the company monetizing its products. Revenue from this particular product, Cereplast Algae Bioplastics, is supposed to commence in the first half of this year.
In itself, the news was enough to keep holding on to CERP shares. But the stock price kept dropping.
Why?
It turns out, the company defaulted on a loan in early December. Now that’s bad news. A default is very hard to recover from. And, it significantly tarnished the reputation of the company.
However, the stock is way too cheap for us to sell at this price. At this point, we might as well hang on to the shares and hope for a recovery once revenues start coming in.
. . . . Plug Power (NASDAQ: PLUG) – Sell
PLUG has never gotten the boost we’ve been waiting for. Both the economy and the alternative energy industry have not been supportive of the company.
For instance, low natural gas prices and huge domestic gas resources have made it a very attractive fuel alternative.
Moreover, PLUG recently cut several jobs – never an encouraging sign for a small company.
Let’s go ahead and sell our shares and conserve capital for opportunities with higher upside.
Please Note:
We don’t necessarily review every open position in each Position Update. We focus on the positions experiencing significant news, notable price movement, or a change in recommendation. Please refer to the Performance page on our website for our current buy, sell, or hold recommendation for any positions not mentioned in the Update.
Action To Take
- Sell Plug Power (NASDAQ: PLUG)
Category: TPS Update
