Lombardi’s “3 Penny Stocks That Could Make You a MILLIONAIRE!” (Part One)

Checking out the latest Pennies to MIllions teaser

By Travis Johnson, Stock Gumshoe, April 7, 2015

George Leong edits the Pennies to Millions newsletter for Lombardi, and he’s got an ad out now touting three different “penny stocks” that could make you buckets of cash …

… the basic pitch is for “unknown” or “hidden” stocks with “home run” potential, and generally at fairly low prices (using “penny stocks” in the broadest possible definition here — not necessarily really penny-priced or microcap stocks, but low-priced stocks under $10 or so, with relatively small market capitalizations below a billion dollars).

Here’s how he catches our attention:

“My #1 Pick is like Medifast when it was undiscovered, BEFORE it made $173,789.50 for every $1,000 invested

“My #2 Pick is like Keurig Green Mountain when it was undiscovered, BEFORE it made $668,000 for every $1,000 iphnvested

“My #3 Pick is like Bally Technologies when it was undiscovered, BEFORE it made $207,421.10 for every $1,000 invested”

Not that he picked those three stocks and earned those profits, of course — probably no one did, that’s the nature of backtesting. You go back in time, look at the best imaginable stock performance, and see whether you can find more stocks like those.

But get that $1,000-to-$173,000 number out of your head right now — that would have meant that you found the absolute lowest price in Medifast sometime in 2000, down near 10 cents a share, and put $1,000 into it then held through ridiculous gains over more than a decade when it got to $30. And, of course, sold at $30 after the stock went to $15, then down to $2, then to $20, then down to $4, then to $30, then back down to $15, and now back to $30 again. That’s a wild ride, one most investors wouldn’t stick with even if they had the absurd good fortune to pick a 10-cent penny stock that actually didn’t go out of business. Leong’s picks may or may not be worth your time today, I’ll give you a chance to dig into them in a minute — but if you go into that research thinking about 17,000% gains, well, you’re not going to end up thinking clearly.

We’ve only ever looked at a stock teased by Pennies to Millions once, by the way, and it was not really a “penny stock” — that was several years ago when Leong touted Nokia (NOK)as a $7 stock that he expected to see “triple digit” gains within a few months. That obviously didn’t happen (the shares are still right around $7… to get triple digit gains you would have had to buy in when pessimism was far higher, a year or so after Leong teased it when the stock fell below $2 for a little while), but I don’t know what his actual track record might be beyond that one teaser pick he wrote about in 2011, so we’ll let bygones be bygones and see what he’s pitching this time for his Pennies to Millions newsletter (which, by the way, will run you $195 for the first year and $295 upon automatic renewal).

On to the clues for the “Three Grand Slam Home Run Stocks That Could Make You a Millionaire!” — we’ll look at them one at a time:

“My Hidden Stock #1 Could Lead You to Riches in the Field of High-Tech Electronics…

“LCD screens and chips like the one in your cell phone or tablet aren’t “built” from start to finish.

“Manufacturers use a technology called “photo masking” to burn an image of the circuits onto screens and chips—much like printing a photograph on a piece of light-sensitive paper.

“That’s where the real money is. You could have invested in Research In Motion and lost money when the BlackBerry tanked. Or, you could invest in Microsoft and see what happens to its tiny market share for Windows Phone.

“Now you don’t have to worry about betting on the right phone manufacturer—this #1 stock sells components that they all need….

“This company provides reticles and photomasks (the nuts and bolts of “printing” circuits onto LCDs and chips) to huge companies like LG Electronics, Samsung, and Texas Instruments…