Time to Get on Board the UniPixel Train (UNXL)

If the name UniPixel Inc. (NASDAQ:UNXL) rings a bell, it may be because I suggested it as a bullish idea about a month ago. In fact, I've pegged UNXL as a buy-worthy stock a handful of times over the past year or so. It was my July 12th look, however, that was decisive and left little doubt as to my stance - buy it.

And how has UNXL fared since then? It's up a whopping 12.7%.

OK, it's not great (though you certainly could have done worse) by small cap speculation standards. There's a reason I want to bring UniPixel up again, however, and reiterate my bullish view. I think it's knocking on the door of the breakout I saw coming a month ago that never really materialized.

The nearby chart tells the tale. Although the stock ended July poorly, August has been a great month so far. UNXL has walked back above its key short-term moving averages, and better still, has done so on rising volume. The volume was the missing ingredient with the prior rebound efforts. The 200-day moving average line (green) at $18.63 is a key hurdle. But, if UniPixel Inc. can move above that level, it should seal the deal and get the ball fully rolling. I see that happening, by the way.

For those not familiar with the company, UniPixel makes the materials used in tablet and smartphone touch-screens. Clearly it's a "right time, right place" opportunity. What's worth noting about the company is that UNXL hadn't produced any revenue until last quarter. Before that, it was still developing the product and establishing the manufacturing capacity. Though the loss came in bigger than expected (-$0.40 versus an anticipated -$0.30), worrying about a loss from a startup in its first quarter of revenue-bearing production is a little misguided. The $204 million organization just drove $5 million in inaugural sales, and it has a superior product; its touchscreen technology is very energy efficient. More and more manufacturers are interested in it.

For what it's worth, Williams Financial Group recently cut its price target on UNXL. That's bad news on the surface, but relatively good news.... very good news, in fact. Rather than $60 per share, WFG is no saying UniPixel Inc. is "only" worth $45 per share. That's still 200% higher than where it's trading now. The target is based on expectations of $126 million in revenue next year, and a per-share profit of $3.59. Given the strength and marketability of the product, those big numbers aren't out of line. The chart's slowly but surely starting to say the market agrees with the optimistic outlook. Time to get on the train.

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