Yearly Results Brings Interest to Nova Lifestyle, Inc. (OTC:STVS)

It may be a tough decision to choose the right sofa, and you should be as careful in your research regarding furniture maker Nova Lifestyle, Inc. (OTC:STVS). The company added 50% in the past weeks, trading on relatively low, but healthy volumes, and going even higher than the levels from the promotion in September and October last year.

This company holds higher potential than other OTC offers, and its balance sheet is there to prove it:

• $3.1 million cash

• $32 million current assets

• $15.6 million current liabilities

• $5.4 million net income

The STVS ticker hardly corrects by more than 10% in the past days, when some investors decide to cash in their holdings. The stock added 5% on Monday to $3.15, and though it is still far from its heights of $5 or $6, it could claim those levels again.

April is a month of noise and attention for tickers that usually fly under the radar, and STVS spiked in volumes after announcing its latest yearly results. Otherwise, the company is not in active promotion, and as we said, the last one was in the fall, though all it managed to do was cause massive sell-offs a few days later. Since then, the ticker drifted sideways and finally gained a foothold on the upward path in March.

The emailed promotion for STVS used chart information to predict a rising trend, an event that did not materialize. The pumper, one Russ Urban of Speculating Stocks, sent away the message for a small compensation of $1,500. This is the usual price for this pumper, who went silent after STVS. Speculating Stocks last appeared as a promoter in November, with the mention of ChineseInvestors.com, Inc. (OTC:CIIX). But the promotions had no effect for STVS, while causing massive selling and a slump in the price of CIIX.

The company has 18 million shares outstanding, and two of its directors, Wong Ya Ming and Ho Yuen Ching, hold more than 8 million shares among them, with the potential to skew the market. For now, the California-based company selling US-made and imported furniture is trading with less than 100,000 shares per day, and insider selling could change the direction of the stock.

While STVS looks a much safer bet than the usual penny stock climber, it is good to keep in mind the potential for corrections. The stock has not been promoted for several months, and a pumper may decide to take it up, causing disproportionate movements in the graph.