TPS Position Update – January 16, 2015

. . . . Liquid Holdings Group (NASDAQ: LIQD) – Sell

Microcap stocks are great investments, which can provide excellent returns in relatively short periods of time. But, they can also be risky and unpredictable.

Take the case of LIQD, a stock we purchased just last month.

LIQD appeared to be a great company with a bright future… and it possibly still is. However, the company just lost their top client to bankruptcy, causing LIQD shares to plummet.

Even management had no idea their main client was in trouble. They were as surprised as anyone when they didn’t receive payment. So, what could investors have done to prevent this? Nothing. It would have been impossible to see this coming.

Microcap investing is risky… you win some and you lose some. Fortunately, we generally see more positive surprises than negative ones.

LIQD is clearly going to be in trouble for the foreseeable future. Let’s go ahead and sell our shares out and save the remaining capital for better opportunities.

. . . . Envivio (NASDAQ: ENVI) – Sell

ENVI has mostly stagnated as an investment since our purchase. Despite generally positive news, the share price hasn’t been able to break through to higher ground.

Just recently, shareholders announced demands for a new direction for the company. They want new board members, acquisitions, or just a general change of direction.

The stock popped on the news and is now trading close to where we initially purchased it. It seems like ENVI is going to be in the doldrums awhile while it discovers a new path. As such, we’re going to use this opportunity to sell out our position and redirect our capital.

. . . . mCig (OTCBB; MCIG) – Sell

MCIG was supposed to provide us a great opportunity to cash in on the e-cig and marijuana craze sweeping the nation. In fact, we gave it 9 months to show us what it could do. 

However, it’s been nothing but disappointing. Unfortunately, regulations have hurt the industry and MCIG in particular. Also, I’m generally not a fan of OTC stocks, which can be extremely volatile. MCIG is just another reminder than exchange-listed stocks are almost always the way to go.

It’s time to give up on MCIG and move on to other opportunities.

Action To Take

• Sell Liquid Holdings Group (NASDAQ: LIQD)
• Sell Envivio (NASDAQ: ENVI)
• Sell mCig (OTCBB; MCIG)

Category: TPS Update