AFRICANEWSWIRE.NET (June, 27 2012) In a recent Penny Stock Detectives article, editor Sasha Cekerevac notes companies with innovative products can shake up the marketplace and drive corporate profits. Cekerevac believes Reeds, Inc., one of the more interesting penny stocks, has done just that. Reeds produces unique soda products that are sold in over 12,000 supermarkets and specialty food retailers.
“Reeds creates award-winning non-alcoholic ginger brews, using fresh ingredients,” explains Cekerevac. “In addition, Reeds has several other products in the root beer, cola, candy, and ice cream categories.”
According to Cekerevac, for the first quarter of 2012, the company increased revenue by 27% over 2011, to a total of $6.5 million. Gross profit was up 40% in the same period, for a total of $2.0 million. Earnings before non-cash items and financing totaled $268,000, up from just $31,000, details Cekerevac.
Cekerevac points out that when management owns a large share in penny stocks, it generally means they believe in the investment strategy of the firm. Currently, Reeds management and insiders own over 40% of the stock. While this is still a young company that’s expanding, it will take some time for corporate profits to be generated; however, with a growth rate for revenue of over 27% for the quarter, it does appear that its investment strategy is on the right track, according to Cekerevac. The technical analysis of the stock shows that there have been a substantial number of buyers accumulating shares.
“Penny stocks that have consistent buyers accumulating shares will show up in the relative strength of a technical chart,” believes Cekerevac. “Even though there are several bullish indicators using technical analysis, the stock is currently trading in a parabolic formation, which is usually not sustainable. At some point, the momentum will subside and the stock will pull back substantially.”
Cekerevac advises investors to wait for an opportunity in this stock. One sign to watch for when using technical analysis is if the stock attempts to break the high but fails. This is an extremely negative event when looking at a stock through technical analysis. Cekerevac suggests waiting for a substantial pullback before accumulating Reeds shares.
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The editors of Penny Stock Detectives believe low-priced stocks, when researched properly, present investors with great opportunities to accumulate wealth and to increase the value of their investment portfolios. You can learn more about Penny Stock Detectives at www.pennystockdetectives.com.