Oge
If you had keyed into the stocks I shared with members of my private stock trading group on Whatsapp, you should be richer between September 13th, 2021 and now.
I also posted the two stocks here (1 Red Hot Stocks to Buy as Corporate IT Spends Jump in 2021) and here (1 Unpopular Penny Stock that Qualifies as an Explosive Stock) but as anonymous picks.
The first one, Courville Business Solutions appreciated by 95%, from 22kobo to my exit price of 43kobo while the second unpopular penny stock, PharmDeko went from N1.65 to N2.83, 71%
These two picks aren’t in any way close to stocks I would pick myself but thanks to the Explosive Stock Strategy, a proven system that had helped me scan the Nigerian stock market for stocks that’s will spike ahead of the rush.
Where should I channel the proceeds from these penny stocks to?
Well, it’s definitely going to be another interesting penny stock that’s been attracting huge buy interest in the last 3 and 6 months. With performance in these periods printing at 7.6% and 25.32% respectively, I think the sentiment on this energy-driven stock is very much positive.
Let’s look at the fundamental driver of this stock.
Q1, 2021 Result:
- Revenue and gross profit increased by 58% and 42% respectively.
- Operating profit expanded by 68%.
- Interest cover showed a great improvement – from 0.99 to 1.99; this company is able to pay up its interest obligation with earnings from operation (it doesn’t have to borrow or utilize cash reserves for debt servicing).
- Profit before tax went up by 1722% while after-tax profit increased significantly by 2426%.
- EPS moved from a negative region to the positive side, up by 244%.
- Cash flow generated from operations turned positive, in billions, from a negative figure.
Q2, 2021 Result:
- Revenue and gross profit increased by 47% and 76% respectively.
- Operating profit increased by 77%.
- Interest cover moved from 1.3 to 2.1.
- Profit before and after-tax grew by 473% and 540%.
- EPS also blew up by 500%
This is no doubt an outstanding result posted by a penny stock in the Nigerian stock market.
While we await the delivery of the Q3 result, I have started mopping this penny stock and are still buying every dip; the upside potential is so huge that if it continues to increase top and bottom line at a faster rate till the end of 2021, the estimated price in the next 6 – 12 months should be twice its current market price.
Technical Analysis
This penny stock has suffered an intense sell-off between 2014-2017.
From the chart above, you’d notice that it is emerging from the bottom, after rejecting the same support region that was once tested in 2017.
Although the price is yet to rise above the 50-day SMA which is a perfect confirmation of a strong bullish run, I think the positive sentiment behind its above-average volume of 20 million on Friday coupled with the catalyst I shared with members of my private community makes it a strong buy.
This catalyst is one of the top 5 indicators that could make a stock spike in the shortest time which I already shared in my book.
I just dropped the stock in my Whatsapp group.
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