Tumbleweed Communications Corp. (Nasdaq:TMWD)

A speculative small cap stock that I have owned since April, I first came upon it when reading newsfeeds about how Microsoft would be getting into the security game and about how Tumbleweed was small enough to stay under the radar. Microsoft is still working on their client security system which they will most likely package with Vista, and then the ensuing fines the EU will impose on them for packaging it with windows...unless of course they offer a "reduced security edition", just like their "reduced media edition".

Anyway there are two main reasons I have liked TMWD; Government contracts, and Bank security. With government contracts I'm talking about the military, not just the Army, or Air Force, but all four military branches. Besides that they've got numerous contracts with major financial institutions. I figure if their product is relied on by these types of institutions its hard to believe it will be going out of business anytime soon.

I originally bought this stock at $2.98, and stuck with it during a house of pain when it was near dropped around 30% , although now my position is up over 20%. This stock during the bubble was well over $100, now thats a real house of pain. Although if this stock went up for every press release it has issued then it'd be at 52 week highs, but just like Cisco (who also has a ridiculous amount of press releases) it seems the only thing that will boost this company is good numbers.

TMWD is a small cap stock, with low volumes so it can be very volatile, normally going up and down 3-5% daily, so if you decide to buy it MAKE SURE YOU USE A LIMIT ORDER. Market orders are always a no-no when investing, and when I first started investing I made the mistake of using them and probably paid 3-20 cents more than I should have per share. I paid about 8 cents more a share on TMWD than I could have if I only had used a limit order.

I also don't have a problem with profit taking, and plan to do so once this stock starts getting above $4.50, and if it gets up to $5.00 I'm dumping every single share I have as quickly as possible. As far as I know all their major contracts are remaining and if they manage to show a profit at least one quarter inbetween now and then it will easily get into that target range. Although remember this is more of a speculative play in my opinion, you're betting on the company's growth, and speculative stocks should not be used for non descretionary funds, so no IRA investing here. If for some reason this stock has better than expected numbers a short squeeze could push it even higher, and if I see this stock over $6 after a big jump I would actually sell it short considering its volatility you can easily buy it back to cover within a week or two giving yourself an easy 5 or 10% profit.

I am not responsible for your trade decisions made or not made because of my opinion shared here. You should always do your own research before buying/selling a stock.