Blog : Yangaroo is Not a Stock Pick

by Peter Leeds on October 8th, 2012

In response to numerous queries about shares in Yangaroo (one of my favorite penny stocks), we have decided to post our comments as a blog entry.  Every comment made here is the opinion of Peter Leeds alone.

Disclosure:  Peter Leeds owns a significant number of shares of Yangaroo, as well as options and debentures.  Leeds also has indirect control over many more shares, and has participated in most financings which the company has undertaken.  Peter Leeds has no intention or expectation to sell any shares of Yangaroo over the next several months.

Disclaimer:  Yangaroo is an extremely risky investment, with potential for the shares to fall in value to zero.  This blog is not a suggestion for anyone to buy shares in Yangaroo, which is very speculative and volatile.  The shares are also thinly traded, and even small amounts by way of market orders (as opposed to limit orders) can push the stock price around significantly.  This penny stock is not appropriate for the majority of investors.  Yangaroo trades on it's primary market, the Toronto Stock Exchange (TSX-Venture), as YOO.

In other words, do not buy this penny stock, and if you do, use LIMIT trading orders.  Take responsibility for your own trading decisions and perform extensive due diligence.  This is also NOT a Hot List penny stock pick, as it represents a personal investment of Peter Leeds.

Many of you know I have been involved with this penny stock for years (going on three different CEOs and a company name change now).  The shares have performed poorly, and it has taken much longer than anticipated to reach the point I always felt this company could get to.  

After watching Yangaroo advance, and speaking with the key players, I believe for the first time this penny stock is on the verge of operational profitability.  I have spoken in person with CEO Moss, and he expects Q4 (Oct - Dec) to be profitable.  He also anticipates the current trend of strongly rising revenues (about 100% YoY) to continue.

First they will report Q3 results in late November for the period of July - Sept.  I expect that to show a slight loss, and hopefully a continuation in the quickly shrinking operating deficit (meaning they are losing money but by much less, for each successive three month period).  

Most recently, I have participated in Yangaroo's latest financing, which saw this penny stock raise about $1,250,000 and lower their debenture payments from 18% monthly to 14% payable in three years.  With the cash influx, the restructuring of the outstanding debt, and the penny stock operating profitably (as of now, ostensibly) it is my opinion that the shares are poised for higher levels.  Of course, keep in mind that I have personally been wrong (as in way too early) on this one already, and I am a heavy supporter of the company, so take any comments I make about them with a grain of salt or ten.

Also keep in mind that this is NOT a Hot List pick, and as such has not been put through Leeds Analysis.   Hopefully this provides some more clarity about where I personally stand with this penny stock, and about the operations of the company itself.