One thing that has been obvious this year, is that people are drinking coffee at alarming rates. Even consumption in markets like Japan is on the rise. More importantly, though, investors have been bought coffee related stocks aggressively. All the way from big names like Starbucks (SBUX: NASDAQ) and Green Mountain (GMCR: NASDAQ) down to super aggressive plays like “>Jammin Java (“>JAMN: OB).
In this entry, I’d like to point out a pink sheets penny stock that seems to have garnered some interest recently. The name of the company is Javulation Coffee Company (JCOF: PK). Shares are currently down 5%, but the stock has more than tripled in the last 10 sessions on reasonably strong dollar volume. Like its industry peer JAMN once did, Javulation, JCOF has taken advantage of bullish sentiment in the coffee space and a stock promotion. JCOF is a roaster and distributor of gourmet and nutritional coffees. The company is based in Ft. Lauderdale, Florida.
Although JCOF trades on the pink sheets which are the lesser of the two penny stock exchanges, the company seems to be fundamentally superior to JAMN. According to Yahoo Finance, JCOF has revenues in excess of $4 million. These revenues have also grown substantially on a percentage basis. The company has credited cruise line sales as a catalyst for this gain.
Is JCOF a Buy?
Now is JCOF a buy at these levels? I am not quite sure. We alerted our subscribers to JAMN early in its run, and the stock traded significantly higher, but due to our short term approach, we still left some profits on the table as shares continued to rise. However, weeks later, shares of JAMN experienced a substantial decline, which is an example of why many penny stocks can’t be held for too long. Shares of JCOF have already made a massive run but still could attract formerly profitable JAMN longs if the shares pull back.
Please remember, despite the fact that JCOF seems relatively solvent, these types of penny stocks are often used best as trading vehicles. Especially after the hype starts to fade. As mentioned above, here at PSE, we try to take a shorter term approach to penny stock trading, often only staying in a stock for 1-3 days. So if you already booked a profit in JCOF, it might be best to move on. If you haven’t traded the name yet, add JCOF to your penny stock list and keep it on your watch list.
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