Good morning friends and fellow traders. No, you're not confused just because it's early on the first day back to work from the weekend. The SmallCap Network newsletter is being sent early today because there's something cool happening this morning... in just a few minutes, in fact. The folks who run Staffing 360 Solutions (STAF) will be ringing the NASDAQ's opening bell today. Not only is it an honor, it's great publicity.
Bryan Murphy gave us a deeper discussion on the matter at the site on Friday, but I can sum it up for you here... the event is going to introduce STAF to a whole new group of investors who've never heard of the company before. They're going to dig around. When they do they're going to find the same information Bryan posted at the website late last week. That is, rising revenue, rising gross profits, improving EBITDA, and improving cash flow.
It's impressive progress. But, you already know that. The people that have never heard of Staffing 360 Solutions have no idea just how much growth is going on there though. What do you think is going to happen once they put two and two together?
Don't get me wrong - we're not saying STAF is going to soar a bazillion percent. Every little bit of publicity helps though.
In any case, if you want to watch it yourself, you can do so right here. It's worth watching just because it's one of our Featured Stocks and we know many of you own it. But, even if you don't own Staffing 360 Solutions it's just kind of cool to watch the exchange kick-off any day's trading in an old-school kind of way.
Speaking of Featured Stocks, did everybody catch Friday's news from Double Crown Resources (DDCC)? Long story made short, the company applied for patents on a couple of recent tweaks to its Translock2 drybulk shipping container system.
If you're not familiar with Double Crown Resources, this is a pretty cool story as well.
Double Crown is the creator of a transportation tool called Translock2, or "Translock Squared." In simplest terms, Translock2 is a drybulk goods container/dispenser that can fit together with other Transock2 boxes the same way intermodal containers fit together (on top of) with other intermodal container boxes.
This is a new concept. Generally speaking, drybulk items like sand, grain, gravel, rice, iron ore pellets, etc. were only transported in the hull of a drybulk ship or in a hopper car, or in a dump truck. Putting things like sand or grain in a box just didn't work. When you open the box -- and you'd have to eventually -- it all spills out in the wrong direction. Product is lost, and it would create a logistical headache.
What if, however, you built a dispenser into the box that perfectly managed control of the goods in question? The supplier could load up a Translock2 at the plant or warehouse, and ship it all just as ordered to the final user. The goods would never have to be touched in transit. The whole box is taken from point A to point B.
That's what Double Crown Resources has done, unveiling a finished design earlier this year.
Most of you already know this by now; we've been covering DDCC since May. What we've not really underscored yet but have a reason to point out today is that this design is very, very well protected by patents, and as of last week is even better protected. Last week, the company applied for patents on the gravity-fed and pneumatic dispensing of materials while being stacked and utilized as storage/silo systems. The second new patent covers collapsible pad-eye pickups strategically placed to distribute a bulk cargo load much more efficiently, as well as provide for a safer and more secure connection while in transport. In the meantime, the patent for the entire Translock2 system has been fully approved by the U.S. Patent Office.
The importance of these patents can't be overstated. Whereas a chemical formula or technological process may be inherently difficult to copy, when you're talking about a physical item that can be easily, visually inspected, it would be easy for copy-cat makers to poach the idea. Double Crown has made sure they can't.
Indeed, we would argue that DDCC is about as well protected, IP-wise, as any other design and manufacturing company on the planet. There's nobody that's going to get in the way, which is great now that it's en route to selling licenses to the Translock2 platform.
DDCC is a name everyone should take a good look at if they haven't already.
As for the overall market, be on your toes this week. The undertow is still technically bullish, but this doesn't change the fact that August is usually a tough month for stocks. Worse, September is just around the corner, and September is even tougher on the market. The average result for the S&P 500 in September is -0.68%, and it's down 56% of the time. Hmmmm. Maybe it wouldn't be a terrible idea to start taking some profits on your more marginal positions you're really not committed to for the long haul.
The nice part about all this is, at least we have a pretty good idea of what to look for to say the market's fallen past the point of no return.Take a look at the daily chart of the S&P 500 below. The former resistance line at 2175 seems to be a support line now, and the 20-day moving average is holding strong, currently at 2172.
Until those two floors snap, we can't worry too much. For that matter, I'd say the VIX needs to push above 15.0 and the S&P 500 needs to break below 2150 before we really start to sweat.
Upside? We're not looking to be a wet blanket here, but it's going to take a 1999-like "fundamentals don't matter" kind of mindset to give us a meltup at this point in the year, especially with the market sitting on a top of a 14% gain in just the past seven weeks. That's a tough act to follow. For the time being you may want to just stick with stocks with great stories that can shrug off a marketwide headwind.