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Stockprowler picks WEGI and NSMG for September
2007
Recent
Stockprowler picks have made considerable gains… PMCL (OTC) spiked
200% since our May Stockprowler Report. IAO (AMEX) traded as high
as 65 cents… up 365% since we picked it on January 7. DIMEZ (Nasdaq)
closed June 8 at 33 cents up almost 140% since our report on January
7. Our last pick ARSC (OTCBB) climbed 65% since our last report on
August 5.
Stockprowler
is placing its bet this month on a couple of penny stocks specializing
in disaster remediation. They do the heavy duty cleanup work necessary
after a hurricane, tornado, flood or other natural disaster strikes.
These stocks have the potential to double or triple during a busy
hurricane season. Don't believe me? http://www.pinksheets.com/pink/quote/quote.jsp?symbol=wegi
and http://www.pinksheets.com/pink/quote/quote.jsp?symbol=nsmg
At last check Windswept Environmental (OTCBB:WEGI) was trading around
18 cents and National Storm Management (OTC: NSMG) at around 8 or
9 cents. Keep in mind these are penny stocks and this is speculation,
not investing. They are not long term buy and holds. Penny stocks
typically have awful balance sheets and contain the usual "going concern"
warnings in the SEC 10Q filings.
The
Atlantic hurricane season in the U.S. typically runs from early August
until late November. NOAA (National Oceanic & Atmospheric Administration)
scientists are predicting an 85 percent chance of an above-normal
2007 season, with the likelihood of 13 to 16 named storms, with seven
to nine becoming hurricanes, of which three to five could become major
hurricanes (Category 3 strength or higher on the Saffir-Simpson Hurricane
Scale). This prediction signifies an expected sharp increase in activity
from the near-normal season observed in 2006. The prediction for an
above-normal 2007 hurricane season reflects the combination of two
main climate factors: 1) the continuation of conditions that have
been conducive to above-normal Atlantic hurricane seasons and 2) the
strong likelihood of La Niña conditions in the tropical Pacific Ocean.
Atlantic
hurricane seasons exhibit prolonged periods lasting decades of generally
above-normal or below-normal activity. Hurricane seasons during 1995-2005
have averaged 15 named storms, 8.5 hurricanes, and 4 major hurricanes.
NOAA classifies nine of the last twelve hurricane seasons as above
normal, with seven being hyperactive. Only three seasons since 1995
have not been above normal. These are the El Niño years of 1997, 2002,
and 2006. This high level of activity contrasts sharply to the 1971-1994
period of generally below-normal hurricane seasons.
Key
factors associated with the current active hurricane era are: 1) a
stronger West African monsoon system, 2) below-average convection
in the Amazon Basin, and 3) warmer than average sea surface temperatures
across the tropical Atlantic. The above average warmth is likely to
continue through the 2007 hurricane season.
The
second key predictor for the 2007 hurricane season is the strong likelihood
of La Niña conditions. La Niña refers to the periodic cooling of ocean
surface temperatures in the central and east-central equatorial Pacific
that occur every three to five years. La Niña favors more Atlantic
hurricanes and El Niño favors fewer hurricanes. The high likelihood
of a La Niña-like influence on the 2007 Atlantic hurricane season
is in complete contrast to last year, when a rapidly developing El
Niño during August-September contributed to a shut-down in hurricane
activity during October and November.
NOAA's
seasonal outlooks do not specify where and when tropical storms and
hurricanes could strike. During above-normal seasons many of the storms
typically form over the tropical Atlantic Ocean. These systems generally
track westward, towards the United States and the Caribbean, thereby
posing an increased threat to these regions. Historically, above-normal
seasons have averaged 2-4 hurricane strikes in the continental United
States and 2-3 hurricanes in the region around the Caribbean Sea.
The
History Channel's Modern Marvels recently featured WEGI subsidiary,
Trade-Winds Environmental Restoration Inc. You can view a replay of
this very interesting segment at http://www.youtube.com/watch?v=4PbAItHB4uc
And,
yes we are still waiting for our ship to come in with DIMEZ. For those
unfamiliar with the story here it is again…
Dime
Bancorp Litigation Tracking Warrants (NasdaqNM:DIMEZ)
Stockprowler first looked at DIMEZ back in April 2005 when the Anchor
Savings Bank vs United States case was being litigated in Federal
Court. It looked like it had 10 bagger plus potential back then and
we believe it still does. So what is this all about?
The
lawsuit was filed against the United States government way back in
January of 1995 by Anchor Bancorp, which later merged with Dime Bancorp.
Between 1982 and 1985, Anchor acquired 8 failing savings and loan
operations. Four of the acquisitions involved financial assistance
from the Federal Savings and Loan Insurance Corporation (FSLIC).
Liabilities in these transactions exceeded assets by $650 million.
Anchor alleged that FSLIC agreed that this sum could be recorded as
goodwill, and that Anchor would not have made the acquisitions if
this had not been the case.
Enacted in 1989, the Financial Institutions Reform, Recovery, and
Enforcement Act required that the aforementioned goodwill be eliminated
immediately. The company argues that this action placed severe restrictions
on its activities and forced the company to sell valuable assets under
liquidation-like circumstances.
Washington Mutual (NYSE: WM) bought out Dime Bancorp several years
ago and inherited Dime Bancorp's lawsuit. The DIMEZ financial instruments
are termed warrants, but in fact, are more akin to rights. They offer
the buyer an opportunity to receive common stock if a particular event
not related to price of the common stock occurs. There is no exercise
price, nor is there a definitive expiration date... the warrants expire
shortly after litigation has been concluded. The warrants offer purchasers
the opportunity to receive 85% of a settlement after taxes and lawyers
fees have been taken out. The warrants trade as DIMEZ, although the
underlying stock for the warrants is Washington Mutual (NYSE:WM).
The
number of shares of Washington Mutual that a holder of the DIMEZ warrants
is entitled to after settlement of the litigation is difficult to
determine and is dependent on several variables. The trial itself
was concluded in July 2005 and we are awaiting the court's decision.
The court could award anything from $0 to $983 million. If the judge
were to award the maximum amount, it would make the DIMEZ warrants
worth somewhere between $7 and $8 …or over 40 times the 17 cents that
they closed at on Friday! Far fetched you say? Well, in another S&L
breach of contract lawsuit filed against the U.S. government, that
of Glendale Federal Bank, Chief Judge Loren A. Smith found that the
government was liable for $908.9 million in damages!
Of course, you could also receive nothing. In the event that the court
does not award damages, the warrants would be worthless. It is a crap
shoot. Don't wager more than you can afford to lose. Shares of DIMEZ
were trading around 23 cents on Friday September 7.
Well,
all right, that's it for now… place your bets, sit back and relax.
Remember, this is speculation not investing and quite often we get
rewarded BIG for taking a chance…
Stockprowler.com
does not receive compensation from companies we profile or from third
parties... we never have and never will. We use our own money when
we buy stocks, and even though we usually take a position in a stock
before we profile a company, our purchases are small relative to the
public float so that the effect on the stock price when we buy or
sell is minimal. Please read our full disclaimer.
Also,
contrary to a commonly held belief, Stockprowler does not have access
to insider information, nor do we want to because trading on insider
information is illegal! All information contained in our reports is
available in the public record... and any written or verbal communication
with company CEOs/IR people strictly adheres to this rule.
Readers
are urged to read the company SEC filings and do their own due diligence
before investing in this or any other stock.
Good
Trading... Stockprowler
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