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VG, RSH – Movers & Shakers

A.J. Watkinson January 13, 2013 Penny Stocks to Watch No Comments
VG, RSH – Movers & Shakers

One of the most exciting things about investing in penny stocks is how much and how fast they can soar or crash in a single day.  At any given moment, several penny stocks will move in double and triple-digit increments.  Some are worth buying, and others are not…

Two big movers in recent trading are Vonage Holdings (VG), and RadioShack (RSH).  Let’s take a quick look at these penny stock movers & shakers.

Vonage Holdings (VG)

What: In Friday’s trading, shares of Vonage fell $0.08 to $2.42 for a one day decline of 3.2%.  The recent drop on Friday came on the back of a 64% jump in average volume (3 mo.) from 1.38 million to 2.27 million shares.

Who:  Vonage is a leading provider of communications services connecting individuals through cloud-connected devices worldwide.  VG services roughly 2.4 million subscribers.  The company sells their products via the internet as well as through major retailers such as Wal-Mart, Best Buy, Kmart, and Sears.

Why:  There are no headlines which may have caused the spike in volume or the drop in share price.  However, Vonage’s CFO, Barry Rowan, is due to step down after VG releases their next earnings report which is due out on February 11th.   In addition, the company was recently granted 3 new patents.

For the next quarter, the forecast is for VG to post $211 million in revenue with EPS earnings coming in at $0.07.  With a trailing P/E of just 1.52x, and a forward P/E of 8.34, shares of Vonage remain relatively inexpensive and are worth taking a closer look at.

RadioShack (RSH)

What: Shares of RSH traded higher by 5.71% in Friday’s trading on normal volume to close at $2.22.

Who:  RadioShack is a national retailer of mobile technology products and services, as well as products related to personal and home technology and power supply needs. RSH offers consumers wireless phones and other electronic products and services from leading national brands, and major wireless carriers.

Per the company website, RSH employs roughly 34,000 sales associates globally. RadioShack’s retail network includes approximately 4,700 company-operated stores in North America, 1,500 wireless phone centers in the US, and approximately 1,100 dealer and other outlets worldwide.

Why: There seems to be minimal news out on RadioShack.  And unfortunately for current shareholders, the stock is trading just 16% off its 52-week low of $1.90.  Analysts forecasts are for yet another drop in revenue to $4.3 billion in 2013 (down from $4.5 billion last year), an EPS loss of $0.45 a share for this year.  This is in addition to a continued decline in sales.

Investors will be hard pressed to find reasons to purchase shares.  Even worse, the company has a long-term debt to equity ratio of 0.72x… and a total debt/equity ratio of 1.13x.

Pure speculation and bottom-fishing are the only two reasons to pick up shares of RSH right now.

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About The Author

A.J cut his teeth while working for more than 12 years on the corporate side of the financial services industry in the suburbs of New York City. In addition, A.J. has successfully traded stocks, options and currencies as an independent trader since the late 90's. Eventually A.J. moved out of the "rat race", landing in North Scottsdale, Arizona. During the past few years, he's worked as the editor of a number of high profile financial newsletters. In this role, he's run trading services for penny stocks, options, currencies, ETFs, and FOREX. While under his direction, each of these trading services had turned in positive performance... something very rare in the financial newsletter industry. In addition, he's been a regular contributor to a number of financial websites- writing under multiple pen names. A.J.'s current goal is to share his real world experiences and success (and failures) in the various financial markets to help others not only make money- but avoid losing it. It's this vision and passion that has led A.J. to launch pennystockreporting.com. Most of all, A.J. hopes to keep the little guy from getting caught up in the highly unscrupulous penny stock pump and dump scene.

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