I’ve been running through a lot of ideas in my head trying to decide what to cover for the Irregulars this week, including the latest teases from Chris Versace for his PowerTrends Profits and the newest “In Fat People We Trust” pitch from Patrick Cox’s Breakthrough Technology Alert, but given the big surge of interest in the latest stock teased by Keith Kohl as a small, emerging Bakken producer that trades for less than 50 cents and is about to start paying a fat 5.8% dividend, well, that one comes right up to the top for our consideration today.
The other two, if you want a little preview of some stocks I’ll probably get to covering in more detail next week, are: Entropic Communications (ENTR), teased by Versace as a semiconductor play for the “always on” world, with deals with cable companies and hardware companies and a strong patent portfolio; and Arrowhead Reseach (ARWR), which is sort of a venture capital biotech firm — that particular peptide targeting bit from Cox’s new teaser is not new, these things are always slow to develop (if they develop at all) and he teased the same company for the same technology back in April of 2012. Haven’t gotten to look at the details of these stocks or their prospects, but I’ll probably write about them next week so you can have a jump on your research if you like.
And outside of the world of teasers, I haven’t made any changes to my portfolio this week … so there are no big reports on that front — and the companies I follow closely haven’t compelled me to change my opinion of late. Apple (AAPL) released earnings that sounded good to me, and I’m encouraged that they went through with a big chunk of their buyback right away at the low prices, steady as she goes while we wait for more products and more dividend increases in the years to come. And Rosetta Stone (RST) made an acquisition that I think puts them on the right track to leveraging their brand into non-foreign-language learning (they agreed to buy Lexia for $22.5 million, Lexia primarily offers a preschool through elementary school reading system and already has a lot of school system customers, a key market opportunity for RST in general), but the acquisition wasn’t huge and I’m not in a big rush to add to my position — they’re not going to suddenly become dramatically more profitable, so while I think this is a fair time to be nibbling I think I’ll keep an eye out for more dips — perhaps the big private equity holders will reduce their positions further and give me a discount on future buying.
I also want to buy more Ligand Pharmaceuticals (LGND) if that stock finally dips a bit, they’ve made a couple deals to get more “shots on goal” for future royalties in the last month and had some positive decisions from regulators, but nothing that wasn’t expected so we’re currently really riding a wave of enthusiasm — I’d rather buy more when the enthusiasm is a bit lower. Those are the stocks bouncing around in my head right now, but I don’t have any great wisdom to share on them. Our most recent stock of the month, Aware (AWRE) is one I haven’t bought personally but they did release earnings that were just fine — no shocking news. The first six months of this year comes in at 10 cents of earnings per share, which represents operating earnings growth year over year (ignoring their patent sales) and my expectation is that they are likely to earn more than 25 cents for the full year, which would be an ex-cash PE of 7. Still looks like a reasonable buy at $5, I still don’t own it personally.
So … on to that Bakken stock as we consider something new.
The basic pitch for Keith Kohl’s favorite Bakken stocks has been running for a long time, recommending some of the more appealing “juniors” in the Bakken area in recent years, but I’ve never seen this particular one teased before.
Here’s the intro that caught my eye in a recent issue of their free Wealth Daily newsletter:
“There’s a new player in North Dakota’s Bakken shale oil field.
“This small, undiscovered company has 11,000 acres in America’s most prolific oil field.
“The company has just completed two new Bakken wells. And the initial production (IP) rates were pretty good.
“Over the next couple of years, this company will drill at least 17 more Bakken wells.
“By the end of this year, it will be pumping 4,000 barrels of oil a day.
“The stock sells for just $0.46 a share.
“But get this: It’s about to start paying its shareholders a 5.8% annual dividend.”
And yes, it’s that dividend that caught my attention. Having a very low share price in penny stock range like this doesn’t mean a company has to be teensy, but most of them at this price are — and it’s pretty rare for these companies to be profitable, let alone pay a dividend of part of those earnings. So which stock is it this time?
That letter was actually signed by Briton Ryle, but the letter links to the standard “Three Bakken Stocks Under $10” pitch that they’ve been using for a while to promote Kohl’s Energy Investor<