Monday, December 9, 2013

$CRDS - A Potential Multibagger - Others $BLIN, $CHYR, $DYNT, $ETAK, $INFU, $OPTT, $PTIX, $RITTW, $TRIT, $VIDE, $VSCI, $WPCS

CRDS - Crossroads Systems, Inc. provides data protection solutions and services worldwide. It develops and markets products that offer online access to data archives through tape-based archive storage solutions for businesses. They have 5 core assets, those are: their newest product, StrongBox, OEM products: SPHiNX and RVA; our net operating losses; our '972 patent portfolio; and 108 other patents referred to as non-'972 patent portfolio.

Market Potential: According to management comments in 3Q CC, StrongBox solves real and increasing pain for a multibillion-dollar market. Their early successes in different market segments have validated customer demand and provided valuable customer feedback. Based on positive market response, the adoption of StrongBox into their partners' core solution sets and their unique product positioning, Management believes the industry is beginning to acknowledge their value proposition.

They have impressive wins and repeat business from customers, such as Jet Propulsion Labs, industry leaders like Hitachi Data Systems, Fujifilm, ViON, Mainline and Iron Mountain have all recognized our market opportunity.

Little background on their 3rd Quarter: For the third quarter, revenue totaled $2.8 million. This represents a decrease of 21% or $700,000 from the same quarter a year ago. The decrease is attributable to a one-time deal with a large RVA customer in 2012, and declines in Iron Mountain custom development revenue. Gross margin percentages remain consistent year-over-year at 75%. cash balance of $9.9 million, compared to $6 million at the end of Q2. They received a net amount of $7 million in July from our Fortress financing after subtracting expenses and repaying our debt to Silicon Valley Bank.

CRDS saw some positive trends in the third quarter. Revenue from StrongBox unit sales and strategic partners was up, although modestly. Expenses were down quarter-over-quarter and we instituted significant cost controls that should lead to a further 25% reduction in operating expenses in fiscal 2014. So they are trying to improve their top lines through sales and strategic partners and bottom line by significant cost control.

Why Buy Now? Crossroads can be multifaceted play 1. Big Data 2. Patent Infringement 3. Network Storage (LTFS)

Big Data: The Crossroads StrongBox® addresses these concerns with an integrated, intelligent Big Data solution that combines StrongBox with $IBM tape libraries and tape drives which support the open standard Linear Tape File System (LTFS). Click here to read more about its potential

Patent Infringement: Crossroads Systems Files Patent Infringement Suits against all big names like Oracle, Tandberg, Dell, and Huawei. Speculators LOVE IP plays, SPEX, VRNG, DSS, VHC etc...Click here for their PI info

Technicals: $CRDS built a strong base between $1.50 and $1.80 and with earnings on 12/12 it could lead to a HUGE breakout even if there is any news about their new IP cases or improved financials.

Insider Buying: There has been a HUGE buying by insiders recently. Click here

Net Operating Losses (NOL): Crossroads has accumulated a $116 million NOL, or net operating loss, which can be used to offset taxes on our future profits.

Huge headcount reduction as part of cost control

Positive Comments form the CEO in 3rd Quarter Conference Call: We will be carefully managing expenses in order to sustain a cost structure that gives us as much time as possible to implement our plans and we're reviewing our IP strategy and should have some news to share in the next 45 days. We strongly believe that patient investors will be amply rewarded.

Other stocks on watch: $PLUG $BLDP $UQM (Fuel Cell/EV stocks..ripped higher and are due for a pull back..$XRSC back on watch list at these levels. I might initiate a position when the price is appropriate. I am long $BLIN, $CHYR, $DYNT, $ETAK, $INFU, $OPTT, $PTIX, $RITTW, $TRIT, $VIDE, $VSCI, $WPCS and a bunch of OPTIONS !!!

Bottomline: After reading into the 3rd quarter report and the tone of the management, I think there is a huge room for CRDS to move higher. From a tech standpoint Chart looks bullish and I think it should hit $2.25 to $2.40 before earnings and have a fresh breakout upon earnings if there are no unpleasant surprises (which I am not expecting).

Disclosure: Added more at 1.90 on Friday to my existing position and my average is around $1.50. My initial alert is at $1.08 on Twitter and it hit $2.08 and then pulled back, consolidated and is poised for new breakouts...

A general Caution and Advise - As I always advise in my posts, Do not chase stocks. please keep in mind that I am not a Stock Market Analyst or an Investment Adviser to count on my recommendations/alerts. As always please do your DD before investing or speculating, start with a small position, always keep your stop losses in place and emotions out. If you are profiting from a trade then always ring the register. Finally thank me for your profits but do not blame me for your losses because you are the one who pulled the trigger!!!

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Who is Mr.Incredible?

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Mr.Incredible is a Momentum/Technical Breakout player who trades small/micro cap plays and who saw a 600% Growth since 2006, Yes even in this down market. I am going to post my real trades (including profits/losses) soon...As a general caution and advice Please start with a small position and always keep your stop losses in place just in case....As usual Do your DD before investing. Thank me for your profits and don't blame me for your losses because you are the one who pulled the trigger!!!