April 02, 2012
Volume 2, Number 45

The Goldman Guide

Missed It by That Much

I bought some tickets and after the drawing I believe I came as close as I ever will to winning the jackpot, should I choose to play again.

Although I may have had 2 numbers right on my tickets, the winning ticket was purchased at a 7-Eleven convenience store about 5 miles from my home. Probably the closest I will ever get to a few hundred million. Unless I break my cardinal rule and buy some of my own recommendations...but more on that later. I am a voracious and speed reader of anything related to stocks and finance and spend hours every day perusing all kinds of data and information that temporarily turns me into the main character from Rain Man. (12 hours til the market opens. No Wopner on TV anymore.)

With the end of the first quarter, I came across some key data points which do not bode well and further bolsters some of our recent comments on the near term outlook.
As noted on page 2, the S&P 500 Index was up 12.6%, NASDAQ Composite up 18.7%, and the Russell 2000 Index was up 12.4%. Apple, by virtue of being the single largest in the S&P 500, accounted for fully 15% of the performance. NASDAQ, which put in a crazy strong ride, was bolstered even further by Apple.

According to Barron's from the earnings perspective, 4Q11 results in the S&P 500 rose 13% but would have been only 10% without Apple. If you look at 1Q12's projected earnings figures, excluding Apple, there will be no earnings growth year-over-year. Ouch. With no earnings growth, high oil prices, and other economic uncertainty, we need solid sequential quarterly earnings and other catalysts to keep the market going. For now, we are handicapping flat to down 2% for the S&P 500 for Q2.

Select Research: Small Cap Picks

The table above is surprising and telling. For 4Q11, our small cap picks dramatically outperformed the microcap (sponsored) research picks. This quarter, the reverse occurred. The stocks in the table above were all recommendations mentioned in 1Q12 editions of The Goldman Guide. While as a whole it appears that the recommendations slightly underperformed the Russell 2000 Index, one must take into account that recommendations were made throughout the quarter, as compared to the static performance of the index from 1/2/12. These figures reflect quarter-end prices returns and peak returns achieved post-recommendation. The peak price performance reached 17% versus the 12.4% YTD numbers and would be even higher if the last 2 stocks, introduced only a week ago, were not included.
Importantly, during the period, 3 stocks rose 30% in 30 days, and although 3 stocks dropped while 10 jumped, none were down from peak prices. Also, 4 stocks were originally introduced in 4Q11, and if we used those prices, which were substantially lower, performance would have been even higher. QCCO is up 9.5% (plus a dividend), GLUU up 74%, LOV up 36% and NSSC up 37%.

Micro Cap Picks Up an Average of 97%

Admittedly, these Opportunity Research performance numbers are skewed, but regardless, it is impressive as these four stocks rose an average of 97% for the period. We remain very positive on all 4 stocks.

SSIE: Although Q1 was likely very challenging for SunSi Energies, other solar players are starting to bounce back. We think new business and business development initiatives will enable SSIE to return to its former levels.

ECTH: ecoTech has its ducks in a row with respect to executing its business plan and we expect more news, including some revenue recognition in Q2.

MIMV: With its biggest competitor acquired by Apple, Mimvi is ripe for a takeover at a premium to its current price. A former Google controller just joined the MIMV team which is a huge plus. Once liquidity increases, the stock should move higher.

NVLX: Once the SG Austria deal closes the overhang on the stock and naked shorts will be removed, causing a short squeeze. Nuvilex’s current value is still less than what the pancreatic cancer treatment is worth alone. It likely goes to $0.15 once it breaks through $0.08 again.

Little known fact:

I am also the editor of pennystockjunction.com and for Q1, we had at least 10 stock picks up over 30% in 30 days!!!

Until next week...

Analyst: Robert Goldman
Rob Goldman founded Goldman Small Cap Research (GSCR) in 2009. Rob has over 20 years of investment and research experience as a senior research analyst and as a portfolio and mutual fund manager. During his tenure as a sell-side analyst, he was a senior member of Piper Jaffray's Technology team. Prior to joining Piper, Rob led Josephthal & Co.'s Emerging Growth Research Group. Rob has also served as Chief Investment Officer of two boutique investment management firms, where he managed Small Cap Growth and Balanced portfolios and The Blue and White Fund.  As an investment manager, Rob's model portfolio was once ranked the 4th best small cap growth performer in the U.S. by Money Manager Review. In addition to his work at GSCR, Rob is the editor of Penny Stock Junction (www.pennystockjunction.com.)

Analyst Certification
I, Robert Goldman, hereby certify that the view expressed in this newsletter accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the recommendations or views expressed in this research publication.

Disclaimer
This newsletter was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research, which typically highlights small cap and mid cap companies, and Goldman Opportunity Research, which features micro cap companies in a sponsored research format. Thus, the Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports.

It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.

The Firm has not been compensated nor does it expect to be compensated for the any research services for any of the other Select Research companies mentioned in this newsletter. Please read the disclaimers found on the initiation reports and updates on our website for compensation disclosure and research subscription terms for the sponsored Opportunity Research companies featured in this newsletter. These companies include: SunSi Energies, Inc., ecoTech Energy Group Inc., Mimvi, Inc., and Nuvilex, Inc.

The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.

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