Often times, I look at stocks I’ve covered in my former life to see how they’re holding up. Some have really taken off- and boy do I wish I was holding them now. But other times, I see a former hot penny stock that’s crashed and burned!
Somebody call 911 for investors of…
NewLead Holdings (NEWL)
Here’s a former high-flying Greek shipping company who’s stock has seen much better days. If you don’t know the company, NewLead Holdings is both a shipping and commodity company, and is engaged in the transportation of refined products and dry bulk goods worldwide. The company transports various products, including gasoline, jet fuel, iron ore, coal, and grains.
It conducts its operations through vessel-owning companies whose principal activity is the ownership and/or operation of product tankers and dry bulk vessels. The company, under specific management agreements, also performs commercial, technical, and operational management of vessels outside of its fleet. As of August 8, 2013, it controlled four vessels, including two tankers and two dry bulk vessels.
In addition, NEWL has gotten into the commodity business. Currently, NewLead is developing the Five Mile mine comprising 7,695 mineral acres containing coal reserves located in Kentucky. Furthermore, it owns a wash plant and a mine, the Viking mine, in Kentucky.
I remember just after the Euro crisis resolved in early 2012, this shipping company’s stock jumped from around $1.40 to over $5 inside a couple of months. Boy do investors miss those “good ol’ days”. Just take a look at this chart below:
As you can see, NEWL is down trading near $0.21 – and that’s after 3 reverse stock splits in the past few months! The company conducted stock splits in October 2013- a 1:15 split… another reverse split of 1:3 in December last year, and then again in March. The latest split was a 1:10! And the stock still tanked to $0.21, even after all the reverse splits.
So should current investors jump ship and take their measly $0.21?
And should new investors get in now that this stock is trading at all-time lows?
New Agricultural Penny Stock Play-
A recent drop in agricultural equipment maker and supplier has seen their stock fall. But it looks like a short-term problem smart investors can capitalize on! Subscribers to my Penny Stocks To Watch newsletter are already in the game…
If you’re curious to know which stock I picked, (read more here.)
I think the answer is pretty clear… get out and stay out! With the company looking at debt restructuring, 75% finanicing of 2 recent fleet purchases, and taking on the risky business of commodity mining… this is a company close to going belly up at any time. And investors smell a loser- especially for a penny stock.
The company lost $8.5 million from discontinued operations, posted a $44 million loss for the last 6 months of 2013, and had a working capital deficit of $155 million. That spells nothing but trouble for all involved.
NEWL has proven to be a hot penny stock, but for all the wrong reasons.
Keeping you one step ahead,