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Blog : Recession Proof Penny Stock Companies?
by John Whitefoot on February 20th, 2009
Without a doubt, the global recession has hit virtually everyone in some form or another. I was reading how an employed couple making $55,000 a year, with a young child, had to start using their local food bank to make ends meet.
At the other end, General Electric Chairman and CEO Jeffrey Immelt waived a bonus and incentives worth at least $11.7 million for 2008 as a global recession and credit crisis saw GE’s profit’s and share price tumble. Sure, he’ll still make do with his $3.3 million salary, but his $11.7 million sacrifice is more than most CEO’s are making.
But then, there are those odd stories that show how the recession hits some of us in ways we never imagined. For example, even the sharks are feeling the impact of the global economic slowdown.
Shark attacks on humans dropped worldwide in 2008 to their lowest level in five years, apparently because the recession has cut back seaside vacations, University of Florida researchers said earlier this week.
Thanks to the global recession, a married Chinese tycoon who could no longer afford to support his five mistresses held a contest to decide which one to keep, local media reported this week.
The contest took a tragic turn when one of the mistresses, who was eliminated based on her looks, drove her former lover and the four other women off a mountain road in an apparent fit of anger, the Shanghai Daily reported.
His wife left him after learning of his affairs, the report said, adding the other mistresses also left him. Yes, tough times indeed.
While there are truly very few recession proof companies, there are some solid penny stocks that are either bucking the trend or positioning themselves for the eventual turn around.
Again, there are astute penny stock companies that are cutting costs and headcount. There are also financially robust penny stocks that are taking advantage of the current economic situation and ramping up their acquisition calendar.
And still, the share prices of even great penny stocks are languishing thanks to the ongoing economic uncertainty. In lieu of pointing out those penny stocks reaching for the stars, it’s better to highlight a few that are waiting for their time to pounce.
A strategic acquisition helped Theragenics Corp. (TGX – Amex) report record results for fiscal 2008. For the year, TGX reported record revenue of $67.4 million, an 8% increase over the $62.21 million recorded in 2007.
“Our accomplishments in 2008 have been significant,” stated M. Christine Jacobs, Chairman and CEO. “In particular, the acquisition of NeedleTech furthers our diversification strategy and provides access to new markets and applications across our entire asset base.”
Going forward, TGX will continue to operate its businesses for cash flow, invest in R&D and invest in infrastructure improvements. While the company will also take advantage of compelling strategic opportunities that may present themselves, it expects to concentrate on organic growth rather than pursuing additional acquisitions in 2009.
IAMGOLD (IAG-AMEX) IAG and Orezone Resources Inc. announced that Orezone shareholders overwhelmingly approved the plan of arrangement transaction with IAMGOLD.
Joseph Conway, IAG’s President and CEO noted, “Our strong balance sheet during the global credit meltdown allowed us to take advantage of a unique market opportunity, making the deal accretive on all key metrics. This asset will solidly launch IAMGOLD as a greater than 1 million ounce producer.”
Gold has been holding steady near $890 an ounce. On Thursday, the metal reached $988.70 an ounce, the highest since July 15. While gold prices may ease as they broach the $1,000 threshold, penny stock companies like IAG are well positioned to take advantage of the market regardless of where it goes in the short term.
While it may be difficult to find penny stocks (or any stock) with great momentum right now…it’s a little easier to find excellent penny stocks that are taking the current recession to fortify their foundations. And only an excellent penny stock with great fundamentals could take advantage of a recession. The rest just make excuses and talk about sunnier days of yore.