A Diamond in the Rough Stock: Empowered Products (EMPO)
Empowered Products, Inc. (EMPO) represents our first entry into our newest Situational Strategy Playbook: Diamond in the Rough Stocks. In this template, we look for high-profit-potential stocks that trade on the OTC-BB (Over the Counter Bulletin Board) with a particular emphasis on companies that hold a realistic potential for upward transition to a senior stock exchange such as the NASDAQ, NYSE, or NYSE Amex Equities.
In essence, the OTC-BB can be viewed as a "Cradle Exchange" where emerging companies can establish a trading history and gain a foothold within their specific market segment before the ascension to a senior exchange listing.
Of significant importance is that the vast majority of listings on the OTC-BB are preliminary concepts that never move to tangible operational status or gain a senior exchange listing. Hence, our initial selection criteria within this strategy template is guided by basic principles as these select few "Diamond in the Rough" companies with real business operations are relatively easy to identify by comparison.
Before we issue a buy-recommendation on any OTC-BB listed stock via this playbook, we look closely at the company's near-term potential for a successful upward transition to a senior exchange listing. This goes hand-in-hand with our mantra of presenting emerging companies that are signaling major increases in share-value. The greatest profit-potential for you as an individual investor is often captured during this crucial, early transition stage. And it all starts on the OTC-BB.
We have identified 4 Prime Upward Transitions within this Strategy Playbook that together have proven to drive stock-prices substantially higher:
- Current and expanding sales of a product or service
- Launch and public recognition of innovative business model
- Expansion of shareholder base & trading volume
- Potential for ascension of stock-listing to senior exchange
Only when these 4 Prime Upward Transitions are in-play should you consider buying into a stock situation via this playbook. In the case of Empowered Products (EMPO), let's take this opportunity to focus solely on the first upward transition: Current and expanding sales of a product or service.
While on surface, this may seem to be among the simplest of concepts (does the company actually sell something?), you may be surprised by how few OTC-BB listed companies can actually satisfy this most basic criteria.
Empowered Products, which is currently listed on the OTC-BB under the symbol EMPO, boasts 10-plus years of sales of its popular PINK® and Gun Oil ® lines of personal lubricants – and the company has posted expanding revenues over the last three years.
Another simple rule of thumb we like to follow is EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). In essence, does the company have earnings? Again, the vast majority of OTC-BB listed companies never achieve actual earnings. Empowered Products is that rare exception.
I'd like to point out that this is just a preview of Empowered Products as a potential Diamond in the Rough stock situation. In upcoming postings, as we continue to elaborate on this sound yet simple selection strategy, we'll be providing you with a lot more information on Empowered Products as a company and as a high-profit-potential stock situation.
Keep in mind that from a trading perspective, EMPO has not yet received any major market attention – the stock does not trade every day – and the company's shares are trading well below the $0.50 per share level. We believe that this represents an excellent environment of calm wherein you can begin your own due diligence on the company.
A great place to start is the company's corporate website at www.EmpoweredProducts.com where you can access tons of information about the company including recent press releases and SEC filings. You may also recall from our initial 2011 EMPO report that Scott Fraser is the CEO of Empowered Products and also the publisher of the Contrarian Wealth Coalition.
|