Positive ID (PSID): Timing Is Everything In a sea of incredible gains PSID was probably my worst idea of 2013. However, the way things are shaping up, it might become my best idea of 2014 joining the ranks of INO, NVLX, and PLPL as monster winners.
On May 29th, 2013 I wrote a feature on PositiveID Corp entitled "Is the World Getting Less Crazy?". At the time, PSID was trading at $.47, and my short term price target was a reasonable $.65.
As it turned out, PSID did trade briefly over $.60, but then swooned under the oppressive weight of massive supply created by rather unsavory financiings. Another problem- the company failed to get the contracts we were hoping to see in 2013.
However, it's hardly the company's fault. This one is a very compelling story. In 2013 PSID fell victim (I know you will find this hard to believe) to our federal government's dysfunction.
You see, the Department of Homeland Security was supposed to begin spending $3.1 billion in 2013 for "Biowatch Gen-3 Phase II, Stage I".
It's a five year program to make America safe from bio-terrorism.
PSID not only had received $30 million in funding from the DHS to create a "Lab in Box" air collection system, Boeing (NYSE: BA) had paid the company $2.5 million as a fee to have the rights to market and include their systems in Boeing's proposal to the Department of Homeland Security. Alongside is a picture of one of their prototype units that is placed near the Capital Building in Washington DC.
Needless to say, nothing happened out of the Federal Government in 2013. If you will recall, the Administration and Congress butted heads, and not only did we not have a budget last year, the Government partially shut down one time, and nearly shut down another time.
It seems our elected squabbling children were able to get back to the point where we now at least have a budget, and things are moving forward for PSID.
PSID is finally getting some traction on an International basis. Through the DoD, PSID announced an exciting new contract today. This could lead to a flurry of domestic contracts as well.
In conjunction with behemoth DoD contractor United Technologies (NYSE: UTX), PSID announced it has signed an agreement to provide its biological and identification technology M-Band to the South Korean Department of Defense.
According to the press release, the pilot program is to be completed by the end of September. The associated SEC filing indicates the value is just under $1 million.
Bioterrorism remains a significant threat to our security. Early detection is virtually non existent with the exception of the PSID systems- there are only 2 manufacturers with the capability of meeting the requirements of Biowatch Gen 3 for the DHS. To your right is their unit positioned in the Boston subway system not far from the scene of the Boston Marathon bombings.
As I write today's edition, the stock is trading at $.085. The stock market now says this company is only worth $3.57 million. That's a joke when you consider the potential value of their technology.
A look at the chart reveals a stock that has come back from the dead in 2014. It ended 2013 at about the $.025 level, and technically now appears to be under heavy accumulation.
Obviously some investors knew PSID would start coming off the canvas in Mid February as the stock made a rather abrupt two day surge from $.04 to a brief high of $.14.
The chart shows the stock came back to a near perfect Fibonacci 61.8% retracement at the $.0699 level, and is now starting to work higher again. Technically, now is the time to get back into this stock.
If this first commercial activity is just the beginning of a series of events of this type, PSID could and should be headed for much higher levels.
I'm showing you the installations in Boston and Washington. The DHS funded them $30 million to develop this early warning detection system for air born attacks. Boeing (BA) paid them hard cash to include their systems in a proposal for Biowatch Gen-3- a $3.1 billion program being implemented to protect our nation from bio-terrorism.
If this is just the beginning, PSID could have a very exciting run from current levels.
From between $.08 and $.09 I'm not going to provide an SSL (suggested stop loss). If you want to own this one now and this level, just pick it up and hold for the long term.
The 50 DMA in blue on the chart just crossed the 200 DMA- a technical indicator known as the "Golden Cross".
It was about this time last year when I began writing features on NVLX at $.05 (now $.33, up 560%) and PLPL at $.25 (now $1, up 300%).
2014 could be the year of PSID. Time will tell, but technically and fundamentally the stars appear to be aligning for this one. I had the right idea, just the wrong year.
MarketByte LLC has been paid a fee of $10,000 in cash at 200,000 newly issued restricted shares by PSID for coverage. The agreement has expired. MarkeByte LLC has contractual obligation to cover PSID.
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