Stock Gumshoe

Now this is a good opening:

“If you missed out on Google at $85. . . Crocs at $15. . . or Akamai at $4. . . This little 40-cent stock can help you forget those misses forever.”

That’s from Tobin Smith’s ChangeWave MicroCap Investor, and this teaser has been circulating for a little while and has been debated over at the forum a bit, but the consensus has been reached on the solution so I thought I’d share it with the broader group here.

The teaser essentially says that if you loved Color Kinetics and Cree, you’re going to really want to get in bed with this little 40-cent stock. Like CLRK and CREE, it’s in the LED business, and LED is a hot topic these days — not only because folks like Philips are buying up LED companies and capacity, but because of the huge opportunities for energy savings by replacing conventional light sources with LEDs.

The bombast is pretty solid in the teaser — incandescent bulbs banned in Europe, Australia and Canada, probably phased out in the US … what will take their place?

Smith thinks you have to get into this stock in the next 90 days because PG&E, the California utility, is going to roll out a campaign to give rebates for LED use.

So … these LED bulbs will in all likelihood be made by Philips, but Smith says they’ll actually be manufactured by his teaser company.

Which is (again, can’t take credit for this one — it was sniffed out by a few readers who emailed me, and on the forums) …

Lighting Science Group Corporation (LSGP on the OTC market)

Hasn’t had a great day today, but it is up a bit from the 40-cent teaser, you can buy it for 50 cents if you’re so inclined. A few things to note:

This is an acknowledged hot market, with tons of companies trying to make a killing at it. LEDs have been around for quite some time and I can’t see that anyone has a proprietary technology that’s going to make them stand out — or at least, not a tiny, severely unprofitable company like this one. That’s not to say I’m right, certainly little microcaps with a good idea often burst into prominence, but it would seem very odd to me if a company grew into greatness by doing private label manufacturing for a few big light bulb companies.

The company does claim to have some protection in their niche by way of market leadership and patents, here’s a quote from a press release:

“LSG is the first company to market a high-output, dimmable, Edison-base white-LED light bulb. The company currently has 25 patents in the LED lighting space and a product portfolio comprised of 30 different SKUs. Lasting up to 50 times longer than incandescent light bulbs, LED bulbs typically pay for themselves in less than two years and do not contain the hazardous materials such as mercury that is commonly found in fluorescent and compact fluorescent products.”

So, that sounds fairly impressive. I can’t help but think that if their technology is really that good, they’ll be bought out by someone since they’ve got less than a half million in sales and seem pretty far from being profitable at the moment. mgpf over at the forums called this a “piece of crap on the edge of bankruptcy”, so Smith’s assessment is not, at least, unanimous.

Let us know how you feel about this one, I do own shares in Universal Display (PANL), which is an OLED company trying to create the next wave of Organic LEDs for display and lighting, but I don’t know much about the current LED generation.

This one came in on a teaser ad for Tobin Smith’s MicroCap Investor on April 26 … and a reader also sent in a suggested solution (and was right — this happens more than half the time, that readers send in a solution and they’re correct … I’ve definitely got the smartest readers in the investing blogosphere).

But anyway, what are we dealing with here? This is a tease that describes the engineer’s holy grail as a material “which combines plastic’s very best qualities, lightweight and moldable, with the best qualities of metal — strength and the ability to conduct electricity.”

The applications are mentioned as being hugely important — lighter vehicles improve gas mileage, cell phone cases become antennas that increase range, plastic can be substituted for silocon in semiconductors, and on and on.

And apparently, Toby Smith has discovered the company that owns the patents and process to build this material.

He compares an investment here with getting in on the ground floor with other new materials or patents — Teflon and Qualcomm’s CDMA are both mentioned.

MicroCap Investor is reportedly already up 100% on this stock … but, according to Smith, “we’ve just reached the point where this rocket is launch-pad ready and about to go stratospheric.”

So what is it? Come on, come on!

Some specific clues:

“They’ve got a manufacturer on board. Dozens of companies are already testing the product, which just garnered a key industry award.”

“The Discovery Channel just did in-depth interviews with the lab scientists.”
The company’s name? Well, thanks to my intrepid sleuth of a reader, I can tell you that this space-age conductive plastics company is …

Integral Technologies (ITKG on the OTC market)

The key industry award they just won was at this year’s Consumer Electronics Show — they won a “CES Innovations 2007 Design and Engineering Award in the Enabling Technologies product category.” They also were awarded a similar price from Popular Science back in 2004, so this has been around for a while (that part didn’t take much sleuthing, I must confess — both awards are listed on their home page).

The product in general is called ElectriPlast, and they’ve got that cell phone idea that’s called the PlasTenna. Clever names, at least. The first commercial order for ElectriPlast came earlier this year from a hearing aid company, which is an application I wouldn’t have thought of.

I don’t know how well this company will do, or if their products will take off, but they are at least limiting risk in some ways — they’re not planning to do any manufacturing or production themselves, they’re aiming to be solely an intellectual property owner, and to license their technology and techniques to the actual makers of these new ElectriPlast products. Looks like Jasper Rubber, another company I know absolutely nothing about, will actually be making the stuff.

So, this is an “asset-light” intellectual property company — their $90 million or so in market cap means we’re hoping each of their patents (assuming they’re all approved) is worth an average of about a million bucks … there isn’t anything else there yet to speak of, though there are several licensed manufacturers now (no idea whether they’ve actually made any ElectriPlast products yet, though I doubt they’re moving that fast).

I’m no engineer, but it does sound like pretty cool stuff. I have no idea how unique their product is, though they do have over a hundred granted and/or pending patents, but if this is really the “holy grail” I have to imagine that others are at least trying to develop similar products — and for all I know, they already have.

The shares are right around two bucks right now, though they’ve definitely spiked on the occasions when the few licensees were announced, and they’re far below their $4 high from last year. Very interesting technology, whether or not it’s a good company to invest in I’ve no idea. Good luck, all, and thanks to my reader for sending this one in.

[For those of you who've been around for a while, this is one we sleuthed out about a month ago but this is an updated version of the writeup -- the company changed names and tickers recently]

“Hi-def video is the new e-mail” is apparently Tobin Smith’s new mantra, as he says in an email from ChangeWave MicroCap Investor. Though as he noted in a speech I heard him give a little while ago, he “borrowed” the term from John Chambers at Cisco. (He also gave much better clues in the speech than he did in this email, by the way)

This was sent in with a sleuthed solution from a reader who wants to remain anonymous, so I can’t take credit … but he did choose the right stock.

So what can we do to “Learn about an incredible microcap stock that has developed a patent-pending solution to bandwidth that can take your $5,000 and turn it into $250,000 in 2-3 years.”

I actually have some extra respect for Tobin Smith, because he usually tells you the payoff may take years on these microcaps … and he also is careful to warn that none of these tiny companies is a sure thing. So at least there’s a little honesty in the ads, and the guaranteed blockbuster returns are not as farfetched as some others posit. And if you ever hear him speak, he’s like the fun drunken frat boy compared to his competitor Louis Navellier, the placid quant in the basement. But that’s neither here nor there.

So … we can subscribe to the newsletter … or we can follow up on the clues.

The clues, for our sleuthing pleasure:

The problem with bandwidth (or one of them, at least) is that ftp is very inefficient … this company apparently has a solution.

“Our little microcap has developed a patent-pending solution that opens the entire bandwidth to data transmission - and it doesn’t require new devices, new boxes, new wires or new anything.”

“This solution is software-based, easy to implement and - best of all - requires Internet users to do nothing different.”

“The technology WORKS and it’s in beta-testing release right now. And full worldwide release could come in the next 60 days.”

“a powerful, yet easy-to-use, tool to download large files 100 times faster than anything currently available. We’re talking a quarter-second to deliver synchronized hi-def video, hi-fidelity audio, text and VOIP. It’s the best solution to the Internet crowding problem by far. And it’s also priced way below competing, but inferior, ’solutions.’”

Management has “a ton of net worth” and lots of experience with startups.

Stock is trading for “about 50 cents” (this was a little while ago).

So what is the company, according to the Stock Gumshoe’s fearless reader? (and I agree):

Voyant (VOYT.OB)

This company used to be called Zeros and Ones and had the ticker ZROS, and it was trading at 50 cents back in the beginning of March when this email began circulating. They recently changed their name and apparently changed their focus to being more of a media and technology holding company that’s looking for acquisitions. The share price more than doubled since the email and then dipped back down a little, it’s now around 65 cents (I still need to update the spreadsheet to track the new ticker).

The technology Tobin Smith is talking about is from their Rocketstream subsidiary, which really does offer a software solution that speeds big media file transfers by 100X. I don’t know if it works, or if they have compelling competitors, or if the shares will go up or down from here … but at least, thanks to the Stock Gumshoe’s readers (the best readers in the blogosphere, I’d wager), you’ve got the name of this microcap company, and you didn’t have to pay a dime.