Hot Penny Stocks: STP, PZZI, XRM

| April 15, 2013

Big MoversIt’s an exciting time for penny stocks, especially Suntech Power (STP), Pizza Inn (PZZI), and Xerium Technologies (XRM).  Let’s take a closer look at these three hot penny stocks…

Suntech Power (STP)

STP shares gained 79% last week!

Suntech Power manufactures silicon solar modules for off-grid systems, homes, and solar power plants.  While the company is based in Wuxi, China, its products are used to provide electric power in over 80 countries around the world.        

Here’s why the stock moved…

STP soared last week thanks to heavy buying by shorts looking to cover their positions.  It appears the shorts decided STP probably wouldn’t fall much further after hitting a low of 33 cents on April 1st.

Investors had been shorting STP ever since it hit a high of $1.99 on January 4th.  Many believed the company would likely default on $564 million in convertible debt due March 15th.

And they were right… 

Not only did Suntech default on the debt, but it announced on March 20th that its Chinese subsidiary would declare bankruptcy.  It’s now believed that STP’s Wuxi operations will be taken over by Wuxi Guolian Development Group.

Now that nearly all the shorts have covered, STP is dropping again. 

After hitting a high of $0.98 last Thursday, the stock is currently trading around $0.59 per share.  That’s a 40% drop in short order.

With a complex bankruptcy ahead, STP is a penny stock to avoid at all costs right now.

Pizza Inn (PZZI)

Pizza Inn is a pizza buffet, delivery/carry out, and express restaurant chain based in Dallas, Texas.  They’ve been serving up pizzas since 1958, when two Texas brothers opened the first restaurant in Dallas. 

Today, the company has over 300 restaurants in the US and internationally.

In addition, Pizza Inn is the parent company of Pie Five Pizza, a fast-casual restaurant offering individual pizzas made to order.  Each Pie Five pizza is ready to enjoy in less than five minutes.

Over the past week, PZZI has surged 45%!

Here’s why…

Last Tuesday, former Applebee’s CEO Dave Goebel said he will open 10 Pie Five restaurants in the Kansas City area.  Goebel said, “this is our opportunity to get in on the ground floor of a concept that is rapidly expanding throughout the nation.”

That’s heavy praise for Pizza Inn from a well-respected authority in the restaurant industry.

As a result, PZZI jumped 15% on the day the news came out.  And it gained another 19% over the next two days to close the week at $6.09.

What’s more, the stock’s up an impressive 121% over the past six months.

I’m usually not one to brag, but subscribers to my Penny Stock All-Stars advisory locked in gains of 142% on PZZI last week.  The shares were first recommended back in August 2011 at $2.48 per share.

Xerium Technologies (XRM)

XRM manufactures and supplies consumable products primarily used in the production of paper, paperboard, building products and nonwoven materials.  The company’s based in Raleigh, North Carolina, and has 28 manufacturing facilities in 13 countries.  Their customers are the leading producers in the paper industry.    

Shares of XRM soared 48% last week!

What’s going on?

The company announced exciting preliminary results for the first quarter of 2013.  Management said EBITDA jumped 55% in the March quarter thanks to steady sales growth and significant cost-cutting.  And they indicated Xerium plans to refinance its senior secured term loan debt and revolving credit facility.

Based on this news, many investors believe XRM is poised for big gains in 2013.

In fact, XRM increased by a stunning 95% in the first quarter.  And the stock is up 162% year-to-date.  However, this sub-$8.00 stock could be on its way back to the low $20s where it traded in early 2011. 

If so, the shares have better than 150% upside from here.

Profitably Yours,

Robert Morris

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Category: Hot Penny Stocks

About the Author ()

Robert Morris is the editor of Penny Stock All Stars, an investment advisory focused on discovering small-cap and micro-cap stocks that are destined to become the market's next Blue Chips. The Wall Street veteran and small-cap stock specialist is also a regular contributor to Penny Stock Research. Every week, Robert shares his thoughts with our readers on a variety of penny stock-related topics.