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Blog : Penny Stocks That Bucked an Ugly August
September 1st, 2010
U.S. stocks climbed cautiously Tuesday as a market seeking direction seized on an improving consumer confidence index as a glimmer of hope for the slowing economic recovery.
On the final day of August, key indexes are on track for a month of steep losses. The Dow has shed nearly 4.1% this month, its first down August in five years. This month is on track to be the blue-chip measure's worst August since 2001.
Small cap stocks have taken an even bigger hit this month. The Russell 2000 Index of small cap stocks is on pace to post its worst August performance in 12 years.
But not all is doom and gloom for penny stocks. Small cap stocks might be down in the summer doldrums, but there are some penny stocks that have been enjoying a summer of gains; and are poised to trend higher.
Media attention, new products, and strong second quarter results have helped ZAGG Inc.’s (ZAGG – Nasdaq) share price climb 79% since the middle of June. On August 10, ZAGG announced that second quarter revenue jumped 65% year over year to $15.1 million. Net income was up 58% at $1.2 million or $0.05 per share.
“This quarter we benefited from new distribution channels, the introduction of popular new devices such as the iPad and the iPhone 4 from Apple and other new mobile device introductions as well as continued strength in our internet sales,” said Robert G. Pedersen, President and CEO.
Record third quarter results, new agreements, and speculation have helped Dynasil Corp. of America’s (DYSL – OTCBB) share price climb 37% since the start of July. On August 16, DYSL announced that third quarter revenue jumped 33% year over year to a record $11.3 million. Net income increased 85% year over year to $727,646 or $0.05 per share.
In late August, DYSL announced that it received seven project awards from the U.S. Department of Energy totaling $6.2 million.
Strong fourth quarter results and a new partnership have helped GlobalSCAPE, Inc.’s (GSB – AMEX) share price climb 134% since the middle of May. On May 14, GSB said that first quarter revenue increased 37% year over year to $4.4 million. The company swung to first quarter profitability of $364,000 or $0.02 per diluted share.
“Our first quarter performance was very strong and we dramatically improved every major financial indicator compared to the same quarter last year,” said Jim Morris, President and CEO.
In mid-August, the company announced that second quarter revenue and earnings slipped year over year. That said, Jim Morris noted encouragingly, “At the midpoint of the year, we are on a revenue run rate of almost $18 million, which significantly exceeds our 2009 results, even with the inclusion of the large Army order last year.”
Small cap stocks may be having their worst August in over a decade, but that doesn’t mean penny stock investors should be sitting on the sidelines.