“Top High-Tech Reco for 2010”

By Travis Johnson, Stock Gumshoe, January 22, 2010

Chuck de Castro gets most of the attention that comes his way by virtue of some mining and resource newsletters —  I’ve written about some of his microcap gold and oil picks, including Hill End Gold, Eromanga Hydrocarbons, Keegan Resources, Painted Pony and Vista Gold over the years. And I actually owned Hill End Gold for quite a while, and would like to buy it again (he’s also pushing that one again today, as far as I can tell — that’s the company that found gold in an “abandoned” mine in Australia, now that modern mining can deal with the water table problems that the original mine hit).

But while some of those picks still look interesting, and performance has certainly varied, he’s now pushing a completely different kind of company. He’s got his eye on a small pharmaceutical stock with an anti-scarring product in clinical trials, and since it doesn’t obviously fit in with his Penny Oil Speculator or Penny Mining Speculator newsletters he’s selling this recommendation on its own for a cool $500.

Can we figure it out without shelling out that cash? Well, your friendly neighborhood Gumshoe loves a challenge — and this Friday File is a nice spot to mention the stock, since it appears that it’ll be a really teensy hard-to-trade stock again, no need to get the dramatically larger free Stock Gumshoe audience revved up just yet.

We start, as always, with the clues. Here’s how de Castro pitches the basics of this stock:

“When JP Morgan, Goldman Sachs, Fidelity, and Union Bank of Switzerland, invest big dollars into a little-known biotech company, you have a situation that screams money.

“This is a tiny pharmaceutical company that developed a drug that can almost completely erase stretch marks and scars from burns, tummy tucks, stitches, and Caesarean sections.

“The company’s scar-erasing drug is based on a very simple and interesting observation. When a very young child gets a cut it heals very quickly, and often without scarring. But the same cut for an adult heals slowly, and often leaves disfiguring scars.

“So the two scientists at the head of this company started exploring why. They examined the blizzard of hormones, proteins, and enzymes that are released by the very young when they get a cut. They compared it with the blizzard of hormones, proteins and enzymes that are released when an old ...

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