No one wants to advocate making money on the back of a tragedy. However, in the stock market, stocks move in direct correlation to general and specific events, including tragedies. In response to the tragic airline event over the weekend, I believe that Implant Sciences Corporation (OTCQB – IMSC - $0.78), an explosive detection systems provider, is likely to come under accumulation this week, positioning the stock as a strong short-term trade.
As widely reported last weekend, a Malaysian airliner bound for Beijing disappeared without a trace. Given that some passengers were later found to have used false passports and the bizarre nature of the event, many aviation security experts believe it could have been the target of terrorists or shot down by a missile.
I have followed aviation security and explosive detection companies for over 20 years and each time a terrorist attack has occurred or been thwarted in the air, shares of explosive detection stocks have spiked higher. If it is confirmed that the disaster was caused by a terrorist with an explosive device, I believe that Implant Sciences will have a series of strong trading sessions, as it has in previous scenarios.
Of course, I do not predict IMSC will move higher just because of its exposure to the industry segment and the recent Asian tragedy. By all accounts, Implant Sciences is a leader in next-generation Explosives Trace Detection (ETD) technology. The company is one of only three ETD manufacturers, and the sole American-owned company to have product approval from the U.S. Transportation Security Administration (TSA). It has a history of meaningful product sales abroad, especially in Asia.
Implant Sciences has developed proprietary technologies used in its commercial explosives and drugs trace detection systems, which ship to a growing number of domestic and international customers. Implant Sciences' QS-H150 portable explosives trace detector has received Qualified Anti-Terrorism Technology Designation and, in addition to receiving TSA qualification for air cargo screening, the company's QS-B220 has also received GSN 2013 Homeland Security Award for "Best Explosives Detection Solution."
Importantly, the company currently is in the final stages of TSA qualification for checkpoint and checked baggage screening. Upon receiving certification for this application, product sales are likely to increase substantially as TSA orders products for a number of airports and other locations.
The stock is afforded a relatively low $44 million market cap and presently trades toward the lower end of its 52-week range due to lower-than-expected sales in its most recent quarter. Still, I believe that investors will be rewarded with an investment in a short-term, event-driven play that has the potential to double upon news of TSA product certification later this year.
The title of today’s blog tells it all. Our featured stock today essentially marries a coffee shop with the servers (and the attire) associated with the iconic theme restaurant. Headquartered in the Seattle area, Baristas Coffee Company, Inc. (OTCPK – BCCI - $0.11) was formed to create a national brand of drive-through espresso stands. By my count, Baristas has 11 locations in Washington, Montana and Florida.
Baristas continues to grow its base by acquiring established businesses that fit its model, by opening new locations and by franchising. In some cases, the company will partner via a joint venture in strategic markets in South Florida where it operates a handful of locations. Baristas has separated itself from the competition with its "theme" of joining attractive female baristas in entertaining (and sometimes revealing) costumes preparing its popular beverages.
Are there times when it seems as if you consistently make the wrong decision when buying stocks? It happens to all of us. We get caught up in a story and don’t follow our gut. Of course when these mistakes cost us money, it is a real issue that hurts us financially, psychologically and emotionally. Not to worry. Much like a shooter in basketball or a hitter in baseball, all we have to do is work on basics and mechanics to improve our success.
I talk a lot about how emotions drive stocks, but I almost never talk about how important our gut feeling is about equity transactions. Look, there are times when no matter what we do a stock is not going to work for us. However in general, slumps and mistakes occur when we do not follow our gut or get too caught up emotionally in a story. Slumps occur when we make the same mistake over and over in our assessment of a given situation or in listening to someone’s ideas that are routinely wrong. Remember, Albert Einstein’s definition of insanity is doing the same thing over and over and expecting different results.
Earlier this week we introduced the concept of investing in stocks that are taking advantage of the surge in marijuana and medical marijuana usage, along with the risks associated with many of these nascent companies. Instead of profiling one of the more well-known stocks in the group, let's examine a stock that is currently under the radar but could rise toward the upper echelon during the course of the year.
mCig Inc. (OTCQB – MCIG – $0.52) is a technology company focused on two long-term secular trends sweeping the globe. These trends include the decriminalization and legalization of marijuana for medicinal and/or recreational purposes and the broad adoption of electronic vaporizing cigarettes (commonly known as “eCigs”) by the world’s 1.2 billion smokers.