Sparky's Picks web page updated: Tuesday 03/30/04
UGOMEDIA INTERACTIVE CORP (UGMI) @ Around 14 Cents
Timing Is Everything!
As a result of the horrific New York City terrorist attack on September 11, 2001, and because of all the worldwide security-related precautions that have since been implemented, planned, budgeted, and scheduled; Sparky thinks that UGMI is in the right place at the right time.
Since September 11, 2001, we’ve each seen hundreds of examples of what’s becoming commonly termed "homeland security." After all, we Americans were savagely attacked, a civilian target on our own soil, and thousands perished on national television.
An unimaginable event happened, and for reasons that could better be explained by sociologists, the vast majority of our great nation’s population instantly adopted an urgent “something must be done” attitude.
Washington’s response to this public outcry was the Dept Of Homeland Security, along with its fiscal 2001–2003 budgets of $ 17 billion, $ 29 Billion, $ 39 billion respectively. Similarly, the Council Of Economic Advisers estimates that the private sector is now spending an extra $ 55 million a year on security. Added annual costs at the state level are estimated by the National Governors’ Assoc to now be over $ 6 billion. And, according to the US Conference Of Mayors, our nation’s cities are now spending over $ 3 billion a year on added security.
Add up all those billions and you’ll see that over $ 100 billion is going to be spent on homeland security in the next 12 months – and that’s just in the USA!
This brief history and description of what’s now the Homeland Security Industry is what Sparky considers the very desirable demand side of the UGMI equation.
On the supply side we have Sciax, a company started by a brilliant inventor named Ken Smart. Through a reverse takeover of UgoMedia Interactive Corp, a NASDAQ shell, the company trades under the symbol UGMI, and a name change to Sciax Corporation is now pending. Ken Smart serves as Sciax’s able President and Nitin Amersey, a respected financier, serves as Chairman & CEO.
In the company’s own words, Sciax is an emerging leader in defense imaging systems for law enforcement and military personnel engaged in counter-terrorism and other special security operations. Sciax is also the manufacturer of Wolf Pack, the company’s tactical remote viewing system used by law enforcement and military organizations in North America and Europe. Customers include military and law enforcement agencies in the US and German governments, contraband interdiction units in Canada Customs, and LAPD SWAT.
Elsewhere on this site, kind members have already written many posts that contain more info, even videos, about Wolf Pack and other UGMI products. Sparky urges you to check these out – it’s all fascinating!
Please note that the above points Sparky wanted to express at this juncture are more conceptual in nature than analytical. But along these lines, UGMI is currently working diligently with its new accountants and expects to be current with its SEC filings in the very near future. At that time, especially if income-related news is released in the interim, Sparky will offer a far more analytical review and outlook.
For now, however, Sparky urges his Readers to focus on the shear size of this new and growing Homeland Security Industry, the industry within which UGMI is so nicely situated.
As for UGMI shares, there are about 40 million outstanding, a free trading float of about 17 million, and an actual trading float closer to 10 million. Over the past 12 months, UGMI shares have seen a closing high of 32 cents last July and a closing low of 5.5 cents just a few weeks back. Volume over the same period totaled about 58.6 million shares, which approximates six complete rotations of available free trading shares.
Looking just at the last few weeks’ trading, Sparky’s made a few potentially significant observations. For one, please note that UGMI share prices rose rather quickly over six sessions from 5.5 to 16 cents, a gain of 173%, on only slightly heightened volume that totaled about 2.9 million shares. Given the relatively small size of UGMI’s free trading float, this didn’t come as any huge surprise to Sparky.
What has come as a huge shock, however, is what's happened since. Specifically, about seven million additional UGMI shares have changed hands, and despite one intraday spike over 20 cents, they closed yesterday at 14 cents.
The first explanation that comes to Sparky’s mind would be aggressive short selling – which has the effect of flooding the market with electronic shares that are apparently available – shares that essentially compete with any real shares being sold. This would not only explain why an increased amount of volume produced very little price gains, but it would also explain why certain brokerage firms (SCOTTRADE, to name one) seem to be refusing to fill buy orders.
If shorting has been as prevalent as Sparky thinks it has been lately, then so much the better! For if all that volume around 16 cents was in fact shorting, not an actual seller, then Sparky thinks it was perhaps an attempt to set up a drive-down-to-cover situation that no doubt involves a far bigger short position than the 2 to 2.5 million share position created just last week. And this would be better still!
But completely aside from a potentially interesting short squeeze situation, Sparky’s also real confident that UGMI isn’t too far away from reporting impressive sales progress on several of many fronts.
What we have here is an excellent combination of popular, high quality products; a very capable management team that’s been tenaciously working on many projects; and a new and growing industry that’s only three years old but is already huge!
For all the above reasons, Sparky urges his readers to immediately accumulate UGMI shares anywhere near current price levels. You will be glad you did!
AI
