TGC, putting the 10k portfolio to work
I apoligize for my lack of posts as of late for there really hasn't been much to post about in regards to me taking a new position. While GM bonds are getting turned to junk, oil prices are falling below $48, and Dell is on a tear, Tengasco Inc is sitting at $.21 a share and doing well, nothing. As an exploration company of oil and natural gas in Tennessee and Kansas, Tengasco Inc is tiny in size with a market cap as of today of $10 million. The company jumped out at me as I was going through my penny stock list (obtained from the search I commented on Sunday) because of its current insider attention. SC Fundamental Value Fund, L.P. has been buying this stock every chance it can get accumulating over one million shares since April 12th. The company has 48.8 million shares, with SC Fundamental Value Fund, L.P. owning over four million. What I am going to do now is simple copy paste a post I made in an investor message board:
"What I also see in their buying behavior which I didn't go into detail on yesterday was the "value buying" I had suggested. By looking at the intra-day charts and the days they bought their shares it can be seen that they didn't buy the shares outright. They simply took shares off of people selling their positions. Now, what does this mean? Well, thinking about it, they are value buying becuase they aren't driving the stock price up to get in. They are quitely taking a position without the stock price moving very much either way. The question I then ask myself is when and why? They basically are now out of debt which I honestly cannot confirm with stats. But, according to what I do have (yahoo finance) they had debt of 3.18 million until the recent sale of the land in Kansas, http://biz.yahoo.com/bw/050309/95879_1.html.I am going to quote part of the third paragraph to promote some thought,
'The net proceeds of the sale were applied to reduce the principal outstanding on the Company's promissory note dated May 18, 2004 bearing interest at 12% per annum and payable to Dolphin Offshore Partners, L.P. ("Dolphin") from the original amount of $2.5 million to $150,000 as of March 4, 2005. Dolphin is the largest holder of the Company's common stock and Peter E. Salas, controlling person of Dolphin, is a Director of the Company.'
Peter Salas (or Dolphin I am assuming) owns 16,412,452 shares as of last year March (Yahoo finance major holders). Though that is a year ago I state this to promote a belief that the company is not driving itself into the ground. It is getting rid of debt now to promote what I believe would be some type of new financing or new move to grow the company. And, since then, the 2nd largest shareholder, SC Fund. Value Fund has been buying shares every chance they get without inflating the price. Furthermore, if you go back to March (2 months ago) you will have noticed that the third largest shareholder Neil Koffler (2,445,160 as of 24-Mar-05; "Major Holders" yahoo finance) bought almost 400,000 shares in three consecutive days OPEN MARKET:
24-Mar-05 KOFFLER, NEIL H.Member 200,000 Purchase at $0.2767 per share. $55,340
23-Mar-05 KOFFLER, NEIL H.Member 95,000 Purchase at $0.2757 per share. $26,191
22-Mar-05 KOFFLER, NEIL H.Member 85,000 Purchase at $0.2785 per share. $23,672
With the sale of property in March and this consistant value buying of SC Fund Value I have enough information to speculate on some sort of move in the future. How big of a move and what kind of move? I am not sure, but with the looks of it if this company could get a big financing deal or be attractive to get bought out you could see a nice price jump. Any other ideas? The question I asked earlier and still ponder is when? How soon would something like this happen? Since I found the company on Sunday I have been trying to take a position without letting the Market Makers kill me on price but have had no luck. The last few days the stock hasn't traded more than 12,000 shares I believe it is. Anyway, I put a limit order for 45,000 shares at $.22 today and so if you see some volume tomorrow it may be me just a heads up. I am going to try and dig for more on everything but if anyone can bring any new thoughts or info to the table that would be great. Hopefully the insiders know something we don't; have a great night."
This should basically cover my thinking behind the company and what I think could potentially happen. I will post up my position if I do in fact get in tomorrow sometime. This is by far the riskiest trade I have done with the 10k portfolio and hopefully will not be the last trade of the 10k portfolio. With a 45,000 share postion each penny the stock moves will be $450 in our out of my pocket; I am sure you can see how the risk/reward works here. Speculation can be the death of you or if you are good at a great way to make alot of cash. Personally, I feel that putting $10,000 on the line for something like this is worth every penny of it, and time will tell how profitable it really is. There will be some sort of rememberance out of this one I can gaurantee you, so sit back and enjoy the show.
To the future,
"What I also see in their buying behavior which I didn't go into detail on yesterday was the "value buying" I had suggested. By looking at the intra-day charts and the days they bought their shares it can be seen that they didn't buy the shares outright. They simply took shares off of people selling their positions. Now, what does this mean? Well, thinking about it, they are value buying becuase they aren't driving the stock price up to get in. They are quitely taking a position without the stock price moving very much either way. The question I then ask myself is when and why? They basically are now out of debt which I honestly cannot confirm with stats. But, according to what I do have (yahoo finance) they had debt of 3.18 million until the recent sale of the land in Kansas, http://biz.yahoo.com/bw/050309/95879_1.html.I am going to quote part of the third paragraph to promote some thought,
'The net proceeds of the sale were applied to reduce the principal outstanding on the Company's promissory note dated May 18, 2004 bearing interest at 12% per annum and payable to Dolphin Offshore Partners, L.P. ("Dolphin") from the original amount of $2.5 million to $150,000 as of March 4, 2005. Dolphin is the largest holder of the Company's common stock and Peter E. Salas, controlling person of Dolphin, is a Director of the Company.'
Peter Salas (or Dolphin I am assuming) owns 16,412,452 shares as of last year March (Yahoo finance major holders). Though that is a year ago I state this to promote a belief that the company is not driving itself into the ground. It is getting rid of debt now to promote what I believe would be some type of new financing or new move to grow the company. And, since then, the 2nd largest shareholder, SC Fund. Value Fund has been buying shares every chance they get without inflating the price. Furthermore, if you go back to March (2 months ago) you will have noticed that the third largest shareholder Neil Koffler (2,445,160 as of 24-Mar-05; "Major Holders" yahoo finance) bought almost 400,000 shares in three consecutive days OPEN MARKET:
24-Mar-05 KOFFLER, NEIL H.Member 200,000 Purchase at $0.2767 per share. $55,340
23-Mar-05 KOFFLER, NEIL H.Member 95,000 Purchase at $0.2757 per share. $26,191
22-Mar-05 KOFFLER, NEIL H.Member 85,000 Purchase at $0.2785 per share. $23,672
With the sale of property in March and this consistant value buying of SC Fund Value I have enough information to speculate on some sort of move in the future. How big of a move and what kind of move? I am not sure, but with the looks of it if this company could get a big financing deal or be attractive to get bought out you could see a nice price jump. Any other ideas? The question I asked earlier and still ponder is when? How soon would something like this happen? Since I found the company on Sunday I have been trying to take a position without letting the Market Makers kill me on price but have had no luck. The last few days the stock hasn't traded more than 12,000 shares I believe it is. Anyway, I put a limit order for 45,000 shares at $.22 today and so if you see some volume tomorrow it may be me just a heads up. I am going to try and dig for more on everything but if anyone can bring any new thoughts or info to the table that would be great. Hopefully the insiders know something we don't; have a great night."
This should basically cover my thinking behind the company and what I think could potentially happen. I will post up my position if I do in fact get in tomorrow sometime. This is by far the riskiest trade I have done with the 10k portfolio and hopefully will not be the last trade of the 10k portfolio. With a 45,000 share postion each penny the stock moves will be $450 in our out of my pocket; I am sure you can see how the risk/reward works here. Speculation can be the death of you or if you are good at a great way to make alot of cash. Personally, I feel that putting $10,000 on the line for something like this is worth every penny of it, and time will tell how profitable it really is. There will be some sort of rememberance out of this one I can gaurantee you, so sit back and enjoy the show.
To the future,
posted by Blain Reinkensmeyer at
9:51 PM
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