TPS Position Update – October 18, 2016

| October 18, 2016

***A Special Message To Our Subscribers***

Next week’s issue of The Penny Speculator, to be published October 25th, will be our last.

Over the past few months, as penny stock prices have run up to lofty levels, you have seen us selling, not buying.

Since late summer, because of our selling stance, much of our portfolio has been liquidated.  This is driven by our interest in preserving our subscribers’ profits.

While our thirst for stocks valued less than two dollars has largely gone away, we see a number of outstanding opportunities in the penny stock market for stocks in the $2-$10 range.

Our sister publication, Penny Stock All-Stars, provides recommendations, analysis, and insight for these stocks. We encourage you to learn more about this service by visiting

Thank you for your support.  It has been our privilege to serve you.

TPS Position Update

. . . . 22nd Century Group (XXII) – SELL       

We recommended the stock in July 2015 at $0.74. Today, it closed at $1.16.

This is a good time to take profits and close out your position in 22nd Century Group.  The firm has just arranged financing through the direct sale of stock and warrants that brings in $11.4 million.  This strengthens the balance sheet and makes sure the company has more than a year and a half of operating cash in the bank.

22nd Century is one of the rare biotech firms we have invested in.  It has developed technology that allows control of nicotine levels in tobacco plants and cannabinoid levels in marijuana plants.  It owns or controls more than 200 issued patents, with another 50 patents pending.

Why aren’t we recommending that you hold your position in 22nd Century?  We’re pleased with a 57% return, and we’re concerned that overall market pressures could erode our profits in the months ahead.

One reason for this… recent financial performance has not been strong.  In Q2 2016, the company lost $141 thousand.  The previous two quarters, the company was profitable. 

. . . . Nevada Gold & Casinos Inc. (UWN) – SELL

We recommended the stock in April at $1.66. Today, it closed at $1.79.

Net income is trending down.  For the most recent quarter, Nevada Gold lost $99.5 thousand following a $241.3 thousand loss the previous quarter.

The stock has lost momentum.  A key factor… Nevada Gold is continuing to have trouble with its slot machine routes in South Dakota.  Revenues slumped to $1.9 million from $2.2 million for the corresponding quarter last year.  South Dakota EBITDA was off by $63,000 while expenses edged up by $47,000.

We would not be surprised to see Nevada Gold spin off its operations in South Dakota to focus on gaming in Washington state and suburban Las Vegas.

In Washington, operating expenses could go up significantly if voters approve an increase in the state’s minimum wage.  Nevada Gold estimates this could increase its annual payroll expense by $1.2 million.

This is a good time to sell.  The firm is well managed and we believe it will perform well in the years ahead.  For now, we’d rather fold than hold, and put our modest profits in the bank.

Action To Take

  • SELL 22nd Century Group (XXII)
  • SELL Nevada Gold & Casinos Inc. (UWN)


Subscribers who followed our recommendation to invest in ReachLocal (RLOC) were handsomely rewarded.

We recommended the stock on April 4, 2016 at $1.86.  On August 9, ReachLocal was acquired by Gannet and stockholders were paid $4.59 a share.

This represents a return of 187% in just over four months!

Category: TPS Update

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