January 29, 2018 10:30 am eastern time

Ceapro which is the only true penny stock on our list and which we have considered speculative for that and many other reasons announced this morning that it has lost a court judgement which appears to total $724,000 plus interest. (There a was another $1.215 million against a Ceapro subsidiary but the press release appears to indicate that is not a concern presumably because the subsidiary has no assets and Ceapro will not have to pay.)

Ceapro at Q3 had cash of $7.4 million and book equity of $24 million and trades with a market value of $48 million. I believe they spent some of the cash in an acquisition in Q4. A judgment that will result in payment of under $1 million is perhaps not that serious.

Still, it is a black mark against the company. I found the timing of the press release to be poor (could have released on the weekend for more time to digest the news before trading started). And I found the wording of the press release to be poor with few details and no discussion of financial impact.

I am surprised to see the stock down only 3% to 5% at the moment.

I have hung onto my losing position in this stock. But it is a speculative company and I have had a number of concerns about poor disclosure.

It might be wise to Sell and move on. I am not changing the rating (Speculative Weak Buy/ Hold at 64 cents) but I definitely think of this as a very speculative company. I have not decided to sell any shares at the moment.