Three Penny Stocks (SVLF) (XFN) (XPO)

More Penny Stocks

Listed below are three stocks whose prices are under $1, which may be consider as penny stocks or small cap/micro cap stocks. Many penny stock lists can be obtained through various lists if you would like to find more penny stocks consider clicking on relative links provided by Google on the right hand side of this blog or right above this paragraph.

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Silverleaf Resorts, Inc (SVLF)

Current price $0.64

52 week range 0.25 - 1.74

Market cap 38.25M

Beta 2.07

Target Price $1.24

Overview

Silverleaf Resorts, Inc. develops, markets, and operates drive-to and destination timeshare resorts. Drive-to resorts are close to principal market areas and induce more frequent short-stay getaways. Destination resorts have close proximity to areas with national tourist appeal and offer a wider variety of room choices to meet different budgets. Silverleaf owns eight drive-to resorts in Texas, Missouri, Illinois and Georgia and four destination resorts in Texas, Missouri, and Massachusetts (Morningstar).

Notes

Silverleaf has reported consistent revenue growth from 2003 but recently reported a loss of $3.9 million or $0.10 per share for their 3^rd quarter 2009. This loss was due to a greater than expected provision for uncollectible revenue. This was a non - cash charge and may never materialize but in most cases I would assume the company will be close to their estimate.

Future Outlook

Due to the nature of Silverleaf’s business one can assume if they weather the remainder of the recession their business strategy should prove to be more profitable in the near future. I would watch vacation trends and traveling data to anticipate a rebound.

XFONE Inc. (XFN)

Current price $0.68

52 week range 0.46 – 1.74

Market cap 14.4M

P/E 13.6

P/B 2.0

P/S 0.7

Overview

XFONE provides local, long distance, and international calling and data telecommunication services. The firm also sells phone cards, cellular services, broadband internet, and messaging services, including email. In addition, the company offers Internet services such as web site design and hosting. XFONE operates cable television service in Mississippi. They have residential and commercial customers in over 75 countries worldwide (Morningstar).

Notes

XFN has sustained strong revenue growth since 2001 and has posted consistent earnings. XFONE recently acquired NTS Communications in Texas and expects growing revenues from this acquisition. They also see an emerging growth in the rural broadband build-out incentive from Washington. They feel this incentive will allow XFN to accelerate into new markets with low cost for shareholders. The company benefited from favorable exchange rates in the last quarter, something that should continue into the next quarter as the US dollar continues to slide against the Israeli Shekel. Although their industry faces many challenges, XFONE feels they have a diversified product offering which should hedge against industry decline.

Future Oulook

I would continue to watch XFN’x subscription base, NIS exchange rates to the US dollar and revenue growth turnaround. The company continues to blame their recent revenue decline on the tough economic environment but needs to improve operating efficiencies by cutting costs until the economy turns around.

Express-1 Expedited Solutions Inc. (XPO)

Current price $1.13

52 week range 0.63 – 1.23

Market cap 35.6

P/E 22.5

P/B 1.3

P/S 0.4

Overview

Express-1 Expedited Solutions is a transportation and logistics company that focuses on time-specific delivery along the supply chain. Its services include expedited transportation, deferred airfreight transportation, local cartage, aircraft charters, dedicated delivery, consolidation, warehouse management, and fulfillment. Its freight is transported by independent contractors. The company operates primarily in the southeastern and midwestern United States (Morningstar).

Notes

I am very familiar with using independent contractors to ship freight for others, almost like a freight brokerage service. This can be a very profitable business segment for Express-1 as the economy turns around and even looking forward. This type of companies experience less hardship opposed to the big freight and shipping companies due to the fact they carry little physical assets and have a fraction of the overhead costs. The industry is not as profitable as it once was due to the turndown but can expect things to improve through 2010.

Risks (ALL)

These penny stocks carry a significant amount of risk due to the small market cap which then increase the amount of volatility in the stock price. You should consult a professional investor before you decide to invest in any stock.