Majesco Entertainment Co (NASDAQ:COOL) Gets A Free Pump

Majesco Entertainment Co (NASDAQ:COOL) was the beneficiary of a free newsletter promotion from the Penny Stock Observer, part of the EGM Firm out of Coral Gables. When a newsletter gives its subscribers a string of losers, the newsletter needs to find a stock that can make its subscribers some money or else its subscribers won't keep playing its picks. The Penny Stock Observer and EGM are one of the most active newsletters in penny stock land and give their subscribers two to four picks a week. We at Insider Financial, on the other hand, give out generally two a month because we only look for what we feel are the best picks and surefire winners for our subscribers. Active traders usually end up losing money overall going from pick to pick.COOL ended up being a good pick on the day of the recommendation and rose over 21%. Majesco is indeed an interesting company with a lot of value and was due for a bounce. Majesco Entertainment Company describes itself as "a developer, marketer, publisher, and distributor of interactive entertainment for consumers around the world. Building on more than 25 years of operating history, Majesco develops and publishes a wide range of video games on digital networks through its Midnight City label."Revenues for the three months ended January 31, 2016 were $591,000 with a net loss for the period of $606,000, of which $547,000 relates to non-cash stock based compensation, compared to $3.4 million in revenue and a net loss of $1.1 million in the comparable prior year period. As of January 31, 2016, the Company's cash and cash equivalents were $6.65 million and its working capital totaled approximately $5.7 million, compared to cash and cash equivalents of $17 million and working capital of $15.6 million as of October 31, 2015. The decrease in cash and working capital primarily reflects the special dividend of $0.33 per common share that was paid to shareholders on January 15, 2016 in an effort to return value to shareholders.In January, Majesco released Gone Home: Console Edition for PlayStation 4 & Xbox One and A Boy and His Blob for PlayStation 4, PlayStation Vita, Xbox One, and PC. CEO Barry Honig said:

"We are excited about releasing Gone Home and A Boy and His Blob to a larger audience with updated versions now available across additional formats. We have been eagerly anticipating these new launches as we hope to expand upon the previous success of these award winning titles."

In looking at COOL, there's a lot to like. Insiders now own over 40% of the company. 60% of its market cap is covered by the cash on its balance sheet with no debt. This makes COOL an attractive takeover target and the gaming space has seen plenty of M&A. EA purchased Playfish for $400 million. Oculus, FunPlus and Inmobi have launched investment funds targeting the space. This comes as the gaming industry reported $88 billion in revenues last year and is on track for $110 billion by 2018. Mobile app gaming revenues from smartphones and tablets is expected to grow from $30.3 billion last year to $77 billion by 2017.Currently trading at just a $9.6 million market cap, Majesco Entertainment is an undervalued NASDAQ small cap. The company is run by a seasoned management team with skin in the game and that just returned $10 million to shareholders in the form of a special dividend. COOL is indeed a good find by the Penny Stock Observer and one worth holding on to. We will be updating Insider Financial as soon as we know more. For continuing coverage on COOL, sign up for our free newsletter today and get our next hot stock pick!Disclosure: We have no position in COOL and have not been compensated for this article.