Red Hot Penny Stock: West Point grad leaves Wall Street dumbfounded after he makes dot-com-era business model work
A Taipan Financial News Research Alert
by Andrew Mickey, Editor, BreakAway Investor
March 2, 2007 -- UPDATED April 18, 2007
Sign up to receive DMA for FREE
"Early investors could reap 262% thanks to his staggering success"
The late 1990s were a great time to be an investor. We were all geniuses. After all, who wasn't making money? Every stock, no matter how ridiculous, did nothing but go up. One poster child for the dot-com bubble, both in its upward and downward trajectory, was CMGI (CMGI:NASDAQ). Over the years that followed, CMGI has grown into a mildly successful supply chain management firm. But it was its venture capital business that sent its stock soaring seven years ago.
CMGI was just ahead of its time. As a venture capitalist, it was charged with uncovering, investing in and developing new technologies. And when it brought those technologies to market, that's when the big payoff would come. CMGI was supposed to act as an incubator for new technologies and provide them with the financing and marketing expertise that would make them successful products. But the big payday never came. CMGI failed to take off -- and Wall Street made clear how it felt. CMGI shares plummeted from an all-time high of more than $160 down to less than $2 per share.
Red Hot Penny Stock: Wall Street's Completely Dumbfounded
That's why Texas-based Newmarket Technology (NMKT:OTC BB) is making waves in the business world. Many are left wondering how it was able to successfully use an incubator business model to create such tremendous growth in revenues.
Here's the deal. Newmarket isn't your average stock. In fact, it's a highly complicated business model. You see, Newmarket is a true incubator. It's growing a multitude of businesses and spinning them off. Newmarket shareholders receive additional shares of the new companies when they are spun off. Essentially, it's like receiving regular dividends. In this case, the dividends are in the form of shares of the newly created subsidiaries.
So far, Newmarket has successfully spun off Newmarket China (NMCH:OTC BB) and Diamond I (DMOI:OTC BB) into stand-alone companies. It has also spun off its Latin American operations by selling them to Paragon Financial (PGNF:Pink Sheets).
Just around the corner, Newmarket is going to spin off its VoIP subsidiary. And even though Newmarket has proven its growth potential in China and Latin America, the VoIP segment is probably the most exciting. The VoIP division is headed up by former Qwest Communications COO Peter Geddis. If you're a serious investor, Geddis' association with Qwest should be setting off alarm signals.
Qwest is a Baby Bell that has been through one of the greatest accounting scandals in history. At the time, the scandal rivaled those at Worldcom, Global Crossing and Enron. But it's nothing to worry about. Geddis left Qwest long before any of the fraud and abuse started. The incubator business model scares away many investors and allows Newmarket to quietly grow into a technology powerhouse. And granted, it is a bit complicated, but there are so many benefits to it that Newmarket has only begun to take advantage of.
Red Hot Penny Stock: But It Works, Plain and Simple
Newmarket has a long track record of meeting its goals. Since the company really got its growth rolling, it has successfully met every goal for increasing revenues each time. The systems integrator and incubator has a history of big promises, but always delivers. At the end of 2004, the company boasted it would generate $50 million in revenues in 2005. Wall Street laughed. But Newmarket delivered.
At the start of 2006, Newmarket claimed it was going to rake in more $70 million in 2006. Despite the lofty goal, Nemarket performed handily. In fact, the company announced it exceeded it by 10.8%. On top of that, this red hot penny stock is profitable. That's rare indeed for a company that is growing this fast.
And, on January 18, Newmarket made its boldest claim yet. It called for a rebound of growth in 2007 with revenues of $120 million and it expects to reach $500 million in revenues by 2010. I realize these are some pretty big goals, but Newmarket has an excellent track record.
Right now, the company's stock price doesn't reflect the potential of this achievement. If the company is able to reach its $500 million goal, you're going to be holding an $8 stock. As discriminating investors, we need to look at the worst-case scenario. After all, what if Newmarket completely stumbles and only books $250 million in revenues in 2010? Well, we're looking at a stock in the $2 to $3 range.
So even when looking at the worst-case scenario, the stock still has the realistic potential to generate 52% annualized returns. And there's no way the S&P 500 is going to keep up with that.
Dynamic Market Alert
Your Premier Investment Insight
"For more than a year I've followed your results and comments... the only word I can use to describe my experience is 'fantastic'." -- John, member
Written by J. Christoph Amberger, Dynamic Market Alert offers you the revolutionary investing insight of Dynamic Market Theory -- a system that moves with the ever-changing stock market, and helps you profit when it changes... before the rest of the investing herd can act. Cited as "far and away the premier free investment service...", Dynamic Market Alert gives you access to a global network of experts, profitable investment insight, urgent alerts -- all in a FREE daily e-mail.
Begin receiving the Dynamic Market Alert today. Enter your e-mail address below and click the Join Us button.
We value your privacy!
We value your privacy. We will not share your e-mail address with anyone else.
Jeanne Smith, Director, Dynamic Market Alert
Red Hot Penny Stock: Plan for Success
Newmarket Technology offers its shareholders many benefits besides just owning a rapidly growing company and undervalued stock. One of its most attractive features is that it will be cranking out stock dividends over the next year and a half.
Officially, Newmarket plans to issue three stock dividends over the upcoming 18 months. Keep in mind that means you?ll be getting shares in Newmarket?s subsidiaries in addition to what you already own. It?s the stock that keeps on giving.
And Newmarket has done a great job launching subsidiaries publicly so far. To date, ther are three:
Diamond I (DMOI:OTCBB)
Paragon Financial Corp (PGNF:OTCBB)
Newmarket China (NMCH:OTCBB)
Over the next 18 months the stock dividends will be coming in the form of shares of these companies.
Red Hot Penny Stock: Making the List
Newmarket has successfully joined a pretty exclusive club. Each year Big Four accounting firm Deloitte & Tousche publishes multiple lists of the fastest-growing companies in the world. The lists give a great picture of how Newmarket stacks up against other technology companies around the world.
And it does very well. Since 2001, Newmarket has grown its revenues from less than $1 million to more than $65 million in 2006. Between 2001 and 2005, Newmarket grew 31,633%.
It's growth like this that caught the attention of researchers at Deloitte. Newmarket has been so successful at developing and marketing systems integration technology that it reached No. 5 on the list of the 500 fastest-growing tech companies in North America. The company also ranked No. 1 among all businesses in Texas.
Clearly, Newmarket has been able to turn the much-maligned incubator business model into an astounding success. And now it's going to start spinning off many of its businesses that it has spent the last few years getting off the ground.
Red Hot Penny Stock: Not One to Bet Against
Newmarket's CEO, Philip Verges, is not one to bet against. Not only has he grown Newmarket into a multimillion-dollar enterprise in less than five years since completing his service requirement with the U.S. Army, but he's a firm believer in the future of his company. True belief from top management is not always there in the world of penny stocks. There are a lot of unscrupulous people trying to take advantage of unsuspecting investors. That's not the case with Newmarket.
Just look at the top Newmarket stockholders. Topping the list is Verges. In fact, he currently owns 63 million shares of Newmarket stock, or 38.3% of all outstanding stock -- by far and away the largest shareholder. With a massive holding like that, you can bet his interests are right in line with yours.
Red Hot Penny Stock: Action to take
Buy shares of Newmarket Technology (NMKT:OTC BB) under 45 cents per share. This small Texas company has been making a killing helping major businesses around the world function. It has become a key partner to customers throughout high-growth regions including Latin America and China. Shares won't be hanging around under a dollar for too much longer.
Keep in mind that this is a penny stock: As such it is likely to move dramatically on inorganic volume and demand spikes.
