The Microcap Speculator

A few interesting microcap charts:

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DISCLOSURE: I am long ETLT.OB, PTG, HIHO, UXG, GSS, WGDF.OB, GLDS.OB, and LTFD.OB. I have no position in AVCA, CXTI.OB,or PTSC.OB. Not a recommendation to buy or sell any security. For informational and educational purposes only.

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Most people rarely associate dividends with microcap stocks. However, many of the top performing microcaps discussed here have returned substantial dividends to shareholders. So where do we find the next Patriot Scientific (PTSC.OB) or Highway Holdings (HIHO)?

I’m not aware of any resource that focuses on dividend-paying microcaps (or even smallcaps). But with just a little work, we can track them down. I use these two tools:

1. MSN Money Deluxe Stock Screener: screening for stocks with a market capitalization of less than $250,000,000 and current dividend yield of >= 2 will bring a good list to start with. I usually set the screener to return the top 100 matches, and sift through those.

2. Yahoo! News Search: searching for “dividends & .ob” will bring up recent dividend announcements for otc bb stocks that might not show up in the screen (for example, if they have just recently announced a dividend). Here’s the same thing for the pinkies. I don’t have a good search to capture dividend news for the microcaps trading on the Nasdaq, AMEX or NYSE. Do you?

Using those two resources, here is a list I generated of non-financial microcaps paying a dividend yield of 2% or more. It took less than a half hour to compile, including the time to register for the MSN screener:

Basic

Symbol	Last Trade		Change		Volume	Related Info	Intraday
DECC	3:53PM ET	12.74	0.00	0.00%	16,446	Chart, Messages, Key Stats, More
QUIP	Jan 19	7.00	0.00	0.00%	0	Chart, Messages, Key Stats, More
ELSE	3:57PM ET	5.50	0.28	4.84%	5,723	Chart, Messages, Key Stats, More
TRFX	4:00PM ET	5.50	0.02	0.36%	22,055	Chart, Messages, Key Stats, More
AMSWA	4:00PM ET	7.07	0.02	0.28%	24,318	Chart, Messages, Key Stats, More
EUSEF.OB	3:24PM ET	8.50	0.00	0.00%	7,300	Chart, , More
BABB.OB	2:43PM ET	0.95	0.00	0.00%	8,795	Chart, Messages, Key Stats, More
WSCI	11:57AM ET	3.10	0.02	0.64%	3,080	Chart, Messages, Key Stats, More
DCU	3:23PM ET	2.05	0.05	2.50%	800	Chart, Messages, Key Stats, More
SERV	3:59PM ET	4.24	0.00	0.00%	3,950	Chart, Messages, Key Stats, More
AMNF.PK	3:19PM ET	0.90	0.00	0.00%	5,874	Chart, Key Stats, More
TSC	3:29PM ET	3.68	0.03	0.82%	1,000	Chart, Messages, Key Stats, More
HIHO	4:00PM ET	5.71	0.13	2.33%	72,192	Chart, Messages, Key Stats, More
TSRI	3:54PM ET	4.37	0.03	0.69%	2,475	Chart, Messages, Key Stats, More
CVR	Jan 25	22.00	0.00	0.00%	0	Chart, Messages, Key Stats, More
AIRT	3:59PM ET	8.81	0.01	0.11%	7,300	Chart, Messages, Key Stats, More
KEQU	3:58PM ET	9.62	0.10	1.05%	1,100	Chart, Messages, Key Stats, More
STRZ	Jan 25	8.30	0.00	0.00%	0	Chart, Messages, Key Stats, More
COHT	10:10AM ET	8.58	0.18	2.14%	1,000	Chart, Messages, Key Stats, More

UPDATE (1/28): On Stockpickr, a user named Pam has posted a portfolio of high yielding smallcaps that is worth perusing. I also created a “microcaps with dividends” portfolio using the stocks listed in this article.

DISCLOSURE: I have no position in any of the stocks mentioned. Not a recommendation to buy or sell any security. For informational and educational purposes only.

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A number of readers have emailed me to ask about Yahoo! message board posts insinuating I believe Highway Holdings (HIHO) is about to announce a big Chrysler deal.

Just read the article–thats not at all what I said.

In fact, I said:
(1) that I was skeptical of the rumor;
(2) listed several reasons why I thought it was not true;
(3) that I had sold my HIHO shares into the hype; and
(4) that I think shares will return close to $4.

If you are going to pump-and-dump a microcap stock on a lame rumor, keep me out of it.

DISCLOSURE: I have no position in HIHO. Not a recommendation to buy or sell any security. For informational and educational purposes only.

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Most days in December, Highway Holdings (HIHO)  traded under 10,000 shares. Today: 1.921 MILLION! That’s more than it traded in the previous three months combined, and is by far HIHO’s highest volume day ever. For part of the day, shares were up over 50%.

The news behind this mega-volume surge? I have no idea. Nothing on the wires, EDGAR, or even the Bloomberg terminal. Nothing.

There are a few rumors swirling around. Most surround a huge contract that Highway Holdings will announce within a week (Chrysler, etc.). Could be, but there are reasons to be skeptical:

• most high volume surges are apparent from the open, but today HIHO opened normally and did not gain price or volume traction until 15-20 minutes into the trading day. Note that the Chinese business day was long over by this time.
• HIHO has a history of surging in the first few trading days of the year, then retreating.
• Chinese markets were closed for a holiday. It is certainly possible, but perhaps unlikely, that HIHO, was closing a huge deal during the holiday.

We should find out the cause in the coming days, but I decided not to wait. When I saw shares trading above $6 this morning I put in a sell order, which was filled at $6.25. I still like Highway Holdings, and will try to put on a position again if it retreats close to $4.

DISCLOSURE: I have no position in HIHO. Not a recommendation to buy or sell any security. For informational and educational purposes only.

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