The coming year will see major events play out, including the Presidential election, continued turmoil in Libya, the potential fall of the Euro, and other events that will create some key investment opportunities. Based on analysis I conduct for my financial newsletter, Peter Leeds Penny Stocks, I'm expecting the following events to occur in 2012, with some specific stocks enjoying strong performances as a result.
- This article is written from a politically neutral viewpoint.
- Peter Leeds is personally invested in precious metals.
- Stocks mentioned were previously profiled for subscribers of the Peter Leeds newsletter.
1. Cryocell (OTC:BB: CCEL) benefits from Obama re-election
Based on percentages coming in from nine battle ground states, and the number of Electoral College votes from each, it appears that Obama would win if the election were held today. I expect his lead to increase as the campaign enters full swing.
One company that could benefit from a few more years of a Democratic president would be Cryocell (CCEL). They are a cord blood banking company, with 10 consecutive profitable quarters and a globally expanding client base.
Under a Bush administration that fought against stem cell research, a big part of CCEL's industry, the company and its shares were hammered. Now after several years of "friendlier" policies, and the prospect of another four, Cryocell is building momentum and gobbling up market share. The Peter Leeds price outlook: $4.45.
2. Information Services Group (NASDAQ: III) soars upon $1.8 trillion economic inflow
According to The Washington Post over $1.8 trillion dollars is sitting idle in America's corporations. The original reasons companies were hoarding cash, such as economic uncertainty and European debt contagion fears, are beginning to take a back seat to growth plans. These companies (such as Microsoft with $40 billion cash, Caterpillar with $3 billion, Exxon at $11 billion, etc...) will look to use their cash to capture market share and expand. I'm expecting this increased spending to result in a mild improvement in the unemployment rate, pushing it down from 9% to 7.5% in 2012.
A consulting firm like Information Services Group (III) will be one of the primary beneficiaries of increased corporate activity. They have top clients from a broad range of industries, such as financial services, manufacturing, health care, energy, and more. With the majority of their clientele increasing spending, a portion of those funds will find their way to III. The Peter Leeds price outlook: $2.40.
3. Enservco (OTC:BB: ENSV) rises as Libya fragments
Libya without Ghadafi, much like Iraq after the removal of Hussein, or Egypt with the digression of Mubarrak, will be much less stable. A power vacuum will cause Libya's already divided tribal nation to fragment into warring factions, set on competing for power and settling old scores.
Meanwhile, America, Russia, and China will jostle for influence in this oil-rich flashpoint. China had 30,000 workers in Libya (ChinaUSFocus) before the civil unrest began, and their eyes are squarely set on fulfilling their domestic energy demand. Russia has major influence in the region, and will not cede its interests to China and America easily.
This will create higher oil prices, greater volatility, and a higher risk premium built into costs of the commodity. Due to less reliable overseas oil supplies, America will look to further increase domestic exploration and production.
We're expecting Enservco (ENSV) to be a big beneficiary of this trend. This small, thinly-traded company provides well-site services to our domestic market. They are just turning profitable, have a double-digit growth rate, and are a huge takeover target. The Peter Leeds price outlook: $2.30.
4. S&W Seed (NASDAQ: SANW) scrambles to meet soaring global food demand
A growing population, seven billion, and an increasingly sophisticated diet among China and other developing nations have created rapidly increasing global food demand. According to Food and Agriculture Organization (FAO) data, China’s per capita intake of calories, protein, and fat were well below the world average in 1975, but are now well above the world average. Expect this trend to accelerate in China, as well as India, Pakistan, Indonesia, and other developing nations.
The problem is that there's not even close to enough food, while challenging growing environments routinely wipe out crops.
That's where S&W Seed (SANW) comes in. They breed and develop proprietary alfalfa seed varieties that grow in harsh climates. Global demand for SANW's products just keeps soaring higher. We're expecting their financial strength and solid operational position to translate into further gains in its share price this year. The Peter Leeds price outlook: $8.75.
5. Precious metals prices soar along with Atna Resources (TSX: T.ATN)
We are currently seeing currency devaluations, from USA to Switzerland, from South Korea to the Euro zone. Consider that in America in 1960, $1,000 worth of goods would now cost you $7,360. [http://www.measuringworth.com]
This is causing the relative value of everything to increase. Since precious metals are bought in American dollars, I'm expecting an increase in prices of all metals.
We're expecting Atna Resources (ATNAF) to be one of the biggest beneficiaries of this trend. While they are currently producing and selling gold, they're also finding new reserves, and recently realized that their gold grades under development are higher than originally anticipated. Atna's revenues have been absolutely leaping on an annual basis, to $31.5 million last year. With $82 million in assets and a $90 million market cap, ATNAF is significantly undervalued. The Peter Leeds price outlook: $1.60.
I am expecting the events mentioned above to play out in 2012. As these trends form, they should bring specific stocks, such as those mentioned above, along for the ride. From undervalued companies to those in the perfect place at the perfect time, the opportunities for investors are significant.