Replies to post #244 on Value Microcaps Pick Six Lotto 06 (PSL6)

[SSKILLZ1]

Nsomniyak, taking the challenge. Here goes.

My Six Picks Are: CAGC.OB, CLWY.PK, EDAC.OB, HRSH, LTFD.OB, And TO

I use a combo of solid picks that I think will do extremely well over time, with a few swing for the fences picks. I don't think this contest will require the same % to win as last contest (Just a theory). Anyways here is why I picked each pick.

CAGC.OB (10 Picks)- A solid Pick, and Numerous other people agree with me with it being a sheep pick. They gave good guidence in the PR on Friday, reported a very good q1 of .10 fully taxed. Q2 is generally there seasonally strongest, so could see some big #'s. I say that moves it to the $5.00 range. Time will tell I guess.

Disclosure: I own CAGC.OB

CLWY.PK (1 Pick)- Yes I'm the only one who picked this stock. My Swing for the fences pick, I dislike picking stocks that end with .PK. But this one is really cheap, and If Q1 is any indication, Q2 (Seasonally strong) could possibly be a very big quarter. Stock is waaay cheap with PE under 5. A good quarter could send this stock to $2.00+. Also seems to have a decent amount of cash on the balance sheet as well.

Disclosure: I Do Not Own CLWY.PK

EDAC.OB (5 Picks)- This stock has been a well covered stock on VMC. In good sector. Fully taxed earned of .16, probably a better quarter is coming in q2. Possible PE expansion. Just a solid stock could see $10 by the end of the contest if they deliver like I think they will.

Disclosure: I Own EDAC.OB (Started buying my position back on Friday)

HRSH (3 Picks)- Another solid stock, not going swinging for the fences here. This was my sixth choice, it was a debate between this stock and PED. I went with this one. I expect a better q2 then q1. Q1 (.09) is probably there weakest quarter. Very strong balance sheet, with lots of Cash. Could post a biq q2, plus things sound like they are only getting better here. Ain't going to be a homerun, but yet another solid stock.

Disclosure: I own HRSH

LTFD.OB (2 Picks)-Swing for the fences #2. This stock has disappointed me time and time again. But I'm one hard headed person I guess. Q1 was actually a strong quarter (.04) After eliminating the 75k charge. Q2 revs should be higher then q1 if costs stay in line that could be a .05 or .06 quarter. If we get get a .05 or .06 quarter this stock is really cheap and will fly in my opinion.

Disclosure: I Own LTFD.OB.

TO (1 Pick)-I'm the only one who picked this stock. Here is my low float play. Earned .18 fully taxed Last quarter, am personally expecting even a better q3. Sales growth seems to be picking up here. the stock has recently Pulled back from the $11.00's after the great earning report. I believe this could possible be a momentum stock, that combined with a solid growth story has me convinced that this stock is a solid pick.

Disclosure: I own TO was buying my position in the 8.70's on Friday.

Conclusion: I don't know if these stock will provide me a top 5 finish like last contest, but I do believe they will give solid returns. My philosophey, was to pick companies going into strong seasonal quarter (Such as CAGC.OB, CLWY.PK And LTFD.OB). Stocks coming off seasonally weaker quarters such as (HRSH). And good growth stories such as (EDAC.OB and TO). I believe this give me a unique blend of hitting the low floaters, low PE stocks, growth stories, and seasonal plays. I don't know if this will work, but I feel it is worth a try. Most importantly have fun all. All above is just my opinion, and I could always be wrong though.

[cl001]

My pick 6:
Nickel is the metal I really like. I also like moly a lot, but nickel juniors have lower price to cashflow going forward.
FNI.to
FNI has a lot of nickel resource, but poor operation. FNI had huge intercepted of 2+% nickel at about 70m length and is trading at similar market cap of GCR.V, who intercepted 1+% of nickel at about the same length. Why? FNI had a great Jan, they PRed it, made people to believe it would continue. On earning release, it admitted the problems in Feb due to operational issues. Sounds like RNO Q3 earning last year. Look back, that was a great buying opp for RNO.
FNI is also a great take over target for companies like FNX or HBM.
BMC.v
BMC should be out of nickel hedge by the end of July and starts generating huge cashflow. Its huge Deacon resource should increase 08 production dramatically when it starts to mine it in Q3. All these are not reflected in the stock yet. It is trading at less than 2x next year's cashflow according to my calculation.
BMC is also a good take over candidate for its partner, SMY.AX.

Zinc should continue to rebound this year, China's zinc inventory is low so is LME.
BWR.to
Well covered on VMC, the cheapest zinc producer I can find. It should be a good take over candidate for companies like HBM, LMC and TCK.
HBM.to
Well covered on VMC. Very strong balance sheet, should command a premium of PE. The company should decide how to spend its huge cash soon. Buy another company, pay dividend, stock buy back or it will be taken over soon.

Copper
I believe copper companies are very undervalued compare to copper price. Since copper can be easily hedged, they are good leveraged buy out candidates.
QUA.to
The cheapest copper stock I can find.
TGB
Very cheap with strong moly by products. Very good balance sheet. Should be a good takeover target.