“Travis, can you break this please?”

Checking out the "15 cent stock only a fool would ignore" teaser pitch

By Travis Johnson, Stock Gumshoe, February 4, 2014

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Who can resist an entreaty like that?

Several intrepid Gumshoe readers sent along pleas for a solution to this one today … and we are, as always, happy to oblige. I know you have a choice when it comes to blathering internet chatterboxes, and I want to thank you for choosing this one today.

The pitch is from the Agora folks, and this is the part of the spiel that caught my eye:

“At 15 cents, you could pick up 2,700 shares for just $405.

“And we have reason to believe that on Feb. 19, you could see that $405 turn into a down payment on a house… or a luxurious vacation… or whatever you want!”

We’re expecting a foot of snow here on Gumshoe Mountain tomorrow, so a “luxurious vacation” sounds just about right. What, dear sirs, must I do to achieve said vacation?

Turns out, all we have to do is just buy up some shares of this teensy weensy company, and when news hits in a couple weeks we’ll be rolling in dough and cackling like Scrooge McDuck in his Money Bin.

Gosh, it’s excellent that it’s so easy!

And if only someone could invent a little emoticon to denote sarcasm.

So what is this stock that has something to do with top-secret military technology, will run you just 15 cents, and is going to turn your $405 into a luxurious vacation? Let’s check on those clues …

“… unlike investing in the big blue chips, this breakout doesn’t take a fortune to get started.

“If their technology works out, I wouldn’t be surprised to see a starting stake triple. Or even rise 10-fold….

“The share price could begin moving up starting as early as this February 19th. That’s when I expect major news out of this tiny company….

“Their technology is a scientific breakthrough. Its accuracy was audited by the Department of Defense in late 2012.

“The DOD’s findings?

“According to the government’s own report:

“This technology worked 100% of the time.”

Hmmm, OK, this is actually starting to sound a little bit familiar now. Might be we’ve chewed on some previous iteration of this pitch before. How about some more details?

“The Defense Logistics Agency just mandated that all supplies provided to the Department of Defense use this small firm’s technology.

“Not 25% of supplies. Not even half. It’s an important point, so I’ll repeat…

“All items coming into the defense industry supply chain must have this company’s technology applied.

“Said a different way, this tiny firm… with just 47 employees… has been granted a rare monopoly status by the United States government….

“… in mid-September of 2012 the company’s share price more than doubled in just a two-week period!”

Hmmm. Yep, certainly smells like something we’ve run through the Thinkolator before. I’ll keep you in suspense for just a moment while we figure out why they think it’s about to hit another price-galloping catalyst:

“If I’m right, the announcement will be made during a small meeting being held in Los Angeles, California .

“Similar conferences go for as much as $5,000 just to attend… They’re reserved for the heavy hitters in the industry.

“But you have a chance to be among those “in-the-know” as news from this company breaks…

“And have the opportunity to buy into this tiny company (should you choose to do so) before a possible stampede of money.”

Did I mention who this ad is from? It’s a pitch for Breakthrough Technology Alert, which has teased and hinted at dozens of microcap companies over the years under Patrick Cox, but they’ve now got a new editor named Stephen Petranek — like Cox and many in the business, he’s a former mainstream journalist (he ran Discover Magazine, the Washington Post Magazine, Life, etc.). I think this is his first foray into investment tipping, so I guess we’ll find out how it goes.

And interestingly enough, he’s coming to our attention now with … a stock his predecessors at Breakthrough Technology Alert touted off and on over the last 18 months or so. The pick they’re pitching today is: Applied DNA Sciences (APDN)

APDN is primarily an anti-counterfeiting technology company — the military stuff is that APDN’s SigNature DNA marking is used to secure microchips in the defense supply chain, a mandate made by the Defense Logistics Agency late in 2012 (and yes, saying that “all items coming into the defense industry supply chain must have this company’s technology applied” is a gross exaggeration … right now, it’s all microcircuits, and they’re considering expanding that to a few other categories including bearings, fittings, etc.

I covered this when it was first teased by Patrick Cox back in December of 2012, a far more aggressive campaign than this one, and at the time he and the copywriters were calling it the “best 19 cents you can spend” — since then it has bounced around between 10-30 cents or so, and right now it is indeed right around 15 cents a share, giving it a market capitalization of roughly $125 million.

And, as it was then, it’s a “future” story — they are continuing to make at least small inroads with their security technology and anti-counterfeiting technology, which basically uses plant DNA as a code they implant in a spray or a swab on products, or in the case of soft goods weave into products, and that code, either on the product itself or on the packaging, can be scanned and tested at points along the supply chain to ensure that counterfeits aren’t making their way into the marketplace. The Defense procurement system is obviously a “high value target” for them because the industry is more willing to pay for counterfeit protection than they are to absorb occasional failures of faulty chips or parts, and their waves of press releases make it appear that they’re gaining some traction in the fashion industry, too, but it’s very slow going when it comes to actual revenue.

For the last year, APDN has revenue of about two million dollars — twice what their sales were two years ago, but still minuscule. Their share count has also doubled over the last two years, and they’ve accumulated almost $200 million in losses over their life as a public company. So as I said, you can’t look at their financials and conclude, “hey, what a great company!”

But perhaps you can look at their future and see a huge royalty stream, if their technology is indeed implemented across more of the Defense procurement supply chain, and if premium fiber makers and semiconductor and banking customers jump aboard for their anti-counterfeiting technology. That all depends on how many companies jump aboard, and how much APDN can charge either for the equipment for testing their SigNature DNA marks or for royalties on using this system. As far as I can tell, it’s completely story-based and guesswork right now — there is some likelihood that Congress will force faster adoption of anti-counterfeiting in the Defense supply chain, which could help increase APDN’s revenue base, but they need some real ramping-up of revenue if they’re to grow into their cost base right now. The optimism about the future and the current state of affairs is summed up pretty well by management in their last conference call, the transcript of which is here.

And yes, they are presenting at a Defense electronics conference that’s taking place in a couple weeks, though their talk will actually be on February 20. And I suspect no news will be made, from what I can tell it’s just a conference where they’re spreading the word and probably trying to drum up more customers, but you can see the preliminary program here if you’re interested.

The market is absolutely huge enough to make a company like this a real winner, but that doesn’t mean they’ll necessarily have any traction or pricing power in the end … I’ll keep my fingers crossed for them, it’s undoubtedly cool, but they could easily go up 300% or down 80% — it’s all about the story and the future, not about the financials at all, and it looks like the new editor at Breakthrough Technology Alert is just as excited about the story as the previous two were.

So … sound like the kind of stock you’re interested in? Think this company’s technology is compelling enough that the company should be worth $125 million or more? That’s the real question — and the one I can’t answer at all, you’re on your own there.


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32 Comments on "“Travis, can you break this please?”"

avatar

daleto
Irregular
7
February 4, 2014 3:40 pm

Been sitting on thousands of these shares for a very long time. Got burned in a pump-n-dump scheme years ago and figure it’s a longshot that I’ll ever recover what I put in, but it’s not hurting anything just letting it ride.

joe
Guest
0
joe
February 4, 2014 4:00 pm

i agree i also own a bunch os shares but the cost for them is not going to break me and i also like the concept this is an idea that will be very profitalbe when? i don”t know

B
Guest
0
B
February 4, 2014 3:47 pm

I bought some shares last time Travis covered this stock in a teaser. I only did because it was extremely oversold at the time – got the shares for 9.5 cents! The position has never been in the red yet.

daleto
Irregular
7
February 4, 2014 4:07 pm

That’s a great buy! I don’t think it will be down that ever again, but anything can happen. I made my ill timed purchase under 24, but fees put it well over that.

Johan
Guest
0
Johan
February 4, 2014 3:53 pm

Well, bought 5000 of these shares for around 10USD cents. Investment of about 350 Euros (me European, you know). Do not have a clue if this will work out, but thought it is worth the risk. I’ll have to wait and see…..and keep my fingers crossed:)

Tom
Guest
0
February 4, 2014 4:07 pm

Travis – – Thanks for the info…I too was going to ask you to sort this one out! Thanks.

dbrawner
Irregular
0
dbrawner
February 4, 2014 4:55 pm

Well maybe with this latest push it might finally go somewhere… Oh well… when I bought it I figured it was something to stick in the back of the portfolio without much on the risk side. Got mine at .238 and seen it gyrate about. Didn’t have the commitment to average down but since I bought it for a long term hold, and don’t have much to lose, I’ll see where it winds up.

hipockets
Irregular
1001
February 4, 2014 4:58 pm

Sarcastic emoticons: ^o) or ^o( wheere ^ signifies a raised eyebrow.
Not to be used in response to any Thinkolator research. :>)

hipockets
Irregular
1001
February 4, 2014 5:07 pm

That’s “where”, of course. Stupid keyboard! ^o)

Martha
Guest
0
Martha
February 4, 2014 5:04 pm

If you are a bit of a gambler, and believe in fairy stories, this looks like a stock that could provide a lot of entertainment for you. At around 15 cents or so, 100 shares would only set you back about $15, which would not be a crippling loss if the company dies. But if the hype comes true, that would be a lot more fun. Tsk….

Mark
Guest
0
Mark
February 4, 2014 5:06 pm

Having been a subscriber to BTA for several years now, I can say that I’ve lost way more money than I’ve made on their various recommendations–stocks like ISCO, BTX, and CTIX have been losers for me, among others. To be fair, I’ve done well with NNVC, and several other picks of theirs (which I did not take advantage of) have done well also. This stock looks like it could easily go up maybe 20-30% from .15 to .18 or .20.

olivan leach
Guest
0
olivan leach
February 6, 2014 11:06 am
Mark have you ever heard of the dart board stock picking game? Well buddy you would do just as good tossing darts at a paper with stocks on it and than buying what they hit on. If these people who sell there stock picking service’s hit on 30% to 40% you got a good one. You got to remember these folks will tell you about all the big wins they picked but I can’t ever remember any of them that says we picked a real loser all so. Its kind of like the gambler that is all ways telling about… Read more »
Vic
Guest
0
Vic
February 4, 2014 7:04 pm

They are also re-pumping “Check your pockets. You probably have some of these coins which will be worth a lot more some day.” At least its not as bad as “Say These 5 Magic Words” from you know who.

arch1
Irregular
5223
February 4, 2014 7:55 pm

I formerly followed some of P.Cox newsletter picks ,some small gains some losses
roughly breakeven. Certainly not enough to cover cost of newsletter. This looks
like hoopla. No virtue in being hoopled.

eugene11803
Irregular
8
eugene11803
February 4, 2014 7:59 pm

This “technology” has been around for years. And nothing. Maybe
The company would do better if they went on the TV show, “Shark Tank”.
Great idea but this isn’t the company to do it. I’m out.

hmfic247
Member
0
hmfic247
February 4, 2014 11:28 pm

I’m also OUT! hahaha

Charles Callen
Guest
0
Charles Callen
February 5, 2014 3:50 pm

Is APDN likely to go up in price?

Phillip Ouellette
Guest
0
Phillip Ouellette
February 5, 2014 8:24 pm
There also seems to be some potential competition out there While not aligned with the DOD yet, there are at least two other technologies that could potentially support the same purpose: 1) a private company, Smartwater CSI has a liquid that when illuminated displays a pattern that may be used to identify the owner, (and could be used to identify valid DOD equipment suppliers). 2) CopDots by DataDot Technology Ltd (DDT), sold by Loews home improvement store, a unique identifier applied to property and there is a database for the police to access and find the owners. Here is a… Read more »
emidave
Irregular
0
emidave
February 6, 2014 7:58 am

The story of this stock reminds me of one some years ago called Comparator Systems.
Does anyone remember what happened to that one? Dave

sassykind
Member
27
sassykind
February 6, 2014 9:39 am

DATADOT TECHNOLOGY LIMITED (DDT.AX) IS AN AUSTRALIAN COMPANY AND IT’S PRICE OVERNIGHT IS A PRINCELY A$ 0.0310 PER SHARE.!! OVER HERE IT’S A RECOMMENDED SMALLCAP “BUY UP TO” $0.0350 by Australian Small Cap Investigator newsletter which is part of Port Phillip Publishing . in Melbourne. Sue

bigafrodaddy
Member
8
bigafrodaddy
February 8, 2014 12:42 am

Thanks sassykind. I’m gonna take a look at them as I’m aussie. Thanks to everyone else for their comments too, always interesting.

Leo S
Guest
0
Leo S
February 9, 2014 11:13 am

Thanks Phillip. I jumped to the link you provided. Wow, this sounds great. The $29.95 price is ridiculously cheap for what you get. I can not believe this has escaped common knowledge up to now. Thanks both to Phillip and sassykind. I am looking.

Leo S
Guest
0
Leo S
February 9, 2014 11:14 am

Yeah, forgot to check the box. Take care.

Solyom
Guest
0
Solyom
February 9, 2014 11:45 am

This might be worth a little mad money. The fair value I calculate is a negative 45 cents a share. But the concept is interesting. I might buy a thousand shares at a limit price of 10 cents a share. Occasionally I take a flyer just because it’s fun. I certainly would not pay 16 cents a share.

blackwolf
Irregular
93
blackwolf
February 9, 2014 11:47 am

Travis, what is Stansberry’s tease on something better than bitcoin?

MICROBIOBOB
Guest
0
February 9, 2014 1:51 pm

I’m concerned about this technology being secure. The DNA, as I understand it, is swabbed or sprayed onto the part and can be checked for validity by re-swabbing and checking the sequence. DNA sequencers are readily available and it would seem quite easy to sequence and reproduce the sequence to put onto the counterfeit part. What am I missing here?

Dennis T
Guest
0
Dennis T
February 9, 2014 6:51 pm

I purchased 4000 at .095 and i think it is worth the risk. I can lose that at a casino in a matter of minutes with less odds of coming out a head. I have no idea why i purchased it, but it was recommended in one of the newsletters I take like Wall Street digest.

Dennis T
Guest
0
Dennis T
February 9, 2014 7:04 pm

Followup, it was the writeup from gumshoe a while back that prompted me to buy it. I will treat this as a long term hold.

Eric
Guest
0
Eric
February 10, 2014 2:27 am

I found (IZEA) to be worth dropping a few bucks on. Trades on the PInk sheets, and the company is actually generating increasing revenue qtr to qtr. It capitalizes on social media and frankly, with the star power behind it I don’t see how money can’t be made here. If/When it starts making large volume moves, I will add to my position.

arch1
Irregular
5223
February 10, 2014 3:39 am

Eric I am happy you are glad from dropping. IZEA seems to remarkably have had huge move over last 3 years—-from $130. IPO to $.38 now. As news-shills say tremendous upside if breaks out!!! I have number of dead horses I rode into ground; Will let go cheap.
Again this not advice. fa NOT mean financial adviser. I think I hear faint TAPS in air.

arch1
Irregular
5223
February 10, 2014 4:41 am

Anyone care to join in business venture raising bison/buffalo & collect Govt. “green” subsidy as animals ingest “green” substance & sequester carbon in form of chips where
“buffalo roam”. Possible secondary market & further subsidy selling organic high-fiber chips to alleviate craving of inhalers of ‘medicinal’ substance. Possible huge & growing market. Name “Iron Condor” is taken: using possibly favorable confusion with same I think “Lead Turkey” appropriate. Guaranteee $100 thousand return to investor who first gives me $1 million? Anyone??

paul leve
Guest
0
paul leve
March 14, 2014 7:17 pm

I’ve always wondered why the financial advisers at Agora Financial are working for a living. Why don’t they buy their recommendations and not share them with subscribers. Why should they have to work 5 days a week writing their recommendations when they could be on a beach sipping margaritas?

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