The recent recession has taught me many things. Not enough to know when exactly to predict a recession, when to pull out, jump in, buy or sell, but it has taught me to be more skeptical than normal of anything coming from the lips of the suits and CEOs on Wall Street.

My favorite commercial on TV right now is an excellent example of how not telling the full truth is misleading and akin to wilful deception. And can be thrown on the corporate trash heap of lessons not learned.

Perhaps you’re already familiar with the commercial featuring GM’s newly minted CEO, Ed Whitacre. If not, let me set the stage. The camera pans in on the well-heeled Whitacre as he strides through an assembly plant speaking about the future of the bailed-out auto maker, boasting that it paid back its “government loan, in full, with interest five years ahead of the original schedule.”

The first time I saw the commercial I thought…there’s no way they’ve paid back everything in full…and ahead of schedule. Clearly Mr. Whitacre is speaking with a forked tongue, or his corporate lawyers have scripted his nonchalant Mr. Rogers discussion with me.

Fortunately, there are other more motivated, intrepid writers out there that got to the bottom of GM’s get-rich-quick pyramid scheme.

Daniel Howes of the Detroit News points to some glaring discrepancies between the facts and the auto maker’s ad. As dapper and upbeat as Mr.Whitacre is, what he fails to tell viewers is that a) the repayment of $4.7 billion came from taxpayer funds advanced to GM and b) that the feds still hold 61% of GM’s stock -- valued at something like $43 billion.

It seems that ordinary American’s are not the only ones baffled by the commercial. Rep. D. Darrell Issa (R-Calif.) wrote to Whitacre last week, in regard to the ad’s dubious claim, noting, “We are concerned that GM, under your leadership, has come dangerously close to committing fraud, and that you might have colluded with the United States Treasury to deceive the American public.”


Daniel Howes sums it up nicely, “It all comes down to this: GM’s credibility. Saying you’ve paid back a loan, but omitting the fact that you did it with taxpayer money and that the feds still hold a controlling stake in your business, probably isn’t the wisest way to win friends, woo new customers or rebuild trust.”

As the great Irish writer, Oscar Wilde once quipped, “True friends stab you in the front”. Now I’m not saying that GM's new CEO Ed Whitacre is a friend. But he could at least make an effort to tell me the full truth. Listening to Whitacre is like watching a guest on Jerry Springer explain how he didn’t lie to his fiancé he just didn’t tell her everything that went on with her sister at the trailer park.

Trust and honesty shouldn’t be exclusive. In fact, the two ought to go hand in hand. Especially if automakers want to woo us back.

Which is why I tip my hat to Ford Motor Company. Not that I’ve seen any exciting commercials from them of late. But rather, because the company focused its efforts, streamlined operations, fast tracked gas engine-powered and hybrid-electric models, and announced a number of new fuel efficient alternatives.

Actions speak louder than words. And this one-time penny stock has been rewarded almost nine fold. In February 2009, Ford Motor was trading for as low as $1.50; in late April 2010, it hit a 52-week high of $14.57. That’s a 14 month gain of 871%.

Stepping outside the boundaries of the auto industry, there are a large number of penny stocks whose actions are speaking volumes.

Death care provider Carriage Services, Inc. (CSV - NYSE) has seen its share price trend steadily higher following strong full year 2009 and first quarter 2010 results. On February 17, CSV announced that full year revenue increased 0.04% to $177.62 million. Net income was a record $7.04 million or $0.40 per share versus net income of $1.80 million or $0.09 per share last year.

On May 5, CSV announced that first quarter revenue was up 2.3% at $46.8 million. First quarter net income was up 17.8% at $2.8 million. Since mid February, CSV has seen it’s share price climb over 34%.

Digital cinema projection equipment provider Ballantyne Strong, Inc., (BTN - AMEX) has also seen its share price soar higher on the heels of strong back to back quarters.

In March, BTN announced that full year revenue climbed 31.6% to $72.1 million in 2009. Net income in 2009 amounted to approximately $2.1 million or $0.15 per diluted share, compared to a net (loss) of ($3.0 million) or $(0.22) per diluted share, in 2008.

On May 3, BTN announced that first quarter revenue jumped 48% to $25.3 million. Earnings for the period doubled to approximately $1.0 million or $0.07 per diluted share. Since the beginning of February, BTN has seen its share price soar 175%.

Actions speak louder than words. And penny stock investors put their money where the action is…not (necessarily) where CEO’s shoot off at the mouth.

Author's Bio: 

John Whitefoot is a seasoned penny stock investor with a keen interest in international business and current affairs. With many years of experience in the investment community, John Whitefoot is Sr. Editor at and is devoted to uncovering the news, trends, and ideas that affect penny stocks on a daily basis.