Penny Stocks - Will it Pay?
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Penny Stocks - Will it Pay?

By: priya nigam

When they swipe your credit card at the supermarket or when you book tickets to a concert by phone, do you ever wonder what makes such transactions possible? With payment volumes skyrocketing, billions being spent on gift cards and more or more bills being paid over the Internet, there is a growing need to manage these transactions in an efficient and risk free manner. Here is where companies providing electronic payment solutions step in. Such companies have experienced significant growth over the past decade.

It is almost impossible, however, to think of any aspect of the US economy nowadays without being concerned about the slowing trends. The nation’s service sector has also been witnessing a slowdown in momentum against the backdrop of record high oil prices and a tight credit market. The Institute for Supply Management (ISM) index for non-manufacturing industries fell last month to its lowest reading since March.

Warren Buffett says, “Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well.” Of course, he still recommends studying the company’s fundamentals and the external environment before making a decision. Today, the attempt is to look into Payment Data Systems Inc (PYDS: OTCBB), a San Antonio-based provider of integrated electronic payment processing services to merchants and businesses.

Payment Data Systems said late last week that it had sold certain patents and patent applications to PCT Software Data. The patents and patent applications relate to bill payments made through debit and stored value cards and the sale involved net proceeds of about $750,000. Payment Data Systems retains the global, non-exclusive license under these patents for use with all existing and future customers. Last month, SmartCard Marketing Systems agreed to the expansion of an agreement existing since March.

Payment Data Systems’ COO Louis Hoch said, “The combination of SmartCard's marketing prowess and our payment processing experience creates a unique value proposition for prospective customers.”
In the first week of January, Payment Data Systems announced the promotion of Ken Keller to the position of Vice President and Chief Technology Officer. Keller, who joined the company in 2003, has close to 18 years of experience in the development and delivery of specialized, high volume transaction-based systems.

The company’s net loss expanded to $397,204 in the third quarter ended September 30, from $261,740 in the same period a year earlier. Revenues contracted to $841,171, from $884,269 in the year-ago quarter. However, revenues grew sequentially and the dollar value of credit card transactions jumped 29% from the prior quarter’s levels. Sequential growth in revenues and transaction dollars is likely to have continued in the fourth quarter.

Payment Data Systems is now turning to acquisitions to drive growth. CEO Michael Long said in a letter to shareholders in mid-December that the business model (which includes three distinct product categories, namely Acquiring, Issuing and Bill Payment) offers “significant competitive advantage,” especially with companies seeking single-vendor solutions.

Moreover, the model allows the company to achieve synergies among the three product categories, Long added. Payment Data Systems also remains committed to its goal of getting its stock listed on the NASDAQ or AMEX.
The company’s shares have been on a downtrend since April, when it touched $0.14. Trading around $0.05, the shares are hugging their 52-week lows. What is to be seen is whether the shares can regain lost ground amid a general economic slowdown.

The writer does not own shares in the above stocks. Article courtesy http://www.pennnycents.com

Article Source: http://articlenexus.com

Priya Nigam writes articles about OTCBB and www.pennycents.com/ver04/columns.html" target="_blank"> Penny Stocks . She is a professional writer and the views and statements expressed here are for information purposes only.

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