How do you find out about potential investments? There are somewhere around 20,000 companies that trade on various exchanges and OTC in the United States. That's an awful lot of DD to preform if one wanted to research all of them. If you examined 10 each and every day for a year you'd hardly put a dent in the pile.
That's why stock promotion and investor relations type services are everywhere. There's a lot of competition out there for companies trying to attract investors. And for companies that use their shares as capital to keep the lights on and pay salaries, it can be a matter of survival.
Elite Pharmaceuticals popped onto my radar in a curious way. I use Google as my primary source for news. When I click on my news feed I get links to stories divided into several different categories: Top Stories, World, Business, Sports, Entertainment etc. There's one category that I really like, its called "Suggested for you". I assume Google puts news stories here based on my search history. I've done a lot of searches lately including the keyword SEC, so I'll often see stories that are about the Securities Exchange Commission. I also like listening to Willie Nelson on You Tube so I'll get links to stories about the last surviving King of outlaw country.
I've also done a number of recent searches that include the term "OTCBB", and today there was a story included in that "Suggested for you" section about Elite Pharmaceuticals entitled: Record Sales Spark Elite Pharmaceuticals (OTCBB:ELTP).
The linked story takes me to a site called MicroCapDaily and it provides a very bullish write up of Elite, citing a 150% increase in revenues right off the bat. Its a well written piece and very positive in tone. You can read the entire story by clicking the link above but I will include this little snippet at the very end.
- Currently trading at a $246 million market valuation ELTP does have $11 million in the treasury, manageable debt and fast growing revenues reporting $12.5 million in sales for fiscal 2016 up 150% from last year. ELTP has fast become an Investors favorite; the Company is fully-funded moving forward, has nineteen FDA approved drugs to be manufactured, approximately eighteen more in the pipeline in various stages with numerous partners, and just announced they successfully completed the studies for opioid SequestOx(TM) and in January submitted their first NDA. We will be updating on ELTP when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with ELTP.
Am I sold on ELTP as a long term investment? Uhm.....no, anything but. After perusing their most recent 10K, for the long term I'll definitely take a pass. With over 726 million shares outstanding, an accumulated deficit of over $140 million and having reported losses every year from 1990 forward, I don't see this as a buy and hold play. That is my opinion, others of course can disagree.
But just because I'm not sold on ELTP as a long term investment vehicle, that doesn't mean it might not be suitable for a short term trade.
Why?
I am certain there are a lot of other people in the world who use Google as a source for news in the same manner that I do. And I'm equally certain that there are other people who have done searches which included "OTCBB". I think its highly probable that this "news story" about Record Sales for Elite, that it could be popping up on a lot of news feeds. Even though there are over 700 million shares outstanding, at about 35 cents per share an investment of just $5,000 equals about 14,200 shares.
If the dotcom bubble taught us nothing else, it showed that fundamentals are ultimately meaningless. All that really matters is supply and demand. And with this MicroCapDaily story I definitely see the potential for a significant level of buy side interest to pour into ELTP.
I'm viewing this as, potentially, a prime Greater Fool type play. Despite what I view as incredibly poor fundamentals, I see the possibility for a lot of fools to come storming into this stock starting Monday, and I might just be one of them. The thinking is that if the PPS starts climbing, that even Greater fools will show up and be willing to pay even more providing the possibility of a profitable short term trade.
I will have to see how my day is shaping up tomorrow, I might just be jumping on this one, but not for the long term. With a stock like ELTP I don't want to be in a situation where I'm unable to watch it for any extended period of time. With a penny stock like this I'd be afraid of going to mow the lawns only to come back to find the PPS down big.
Appreciate your thoughts. However, on Elite if you would do more research other than a few superficial numbers, you will find they are on the cusp of getting FDA approval on their first abuse deterrent formulation of a $400 million opioid market on this one drug alone.
ReplyDeleteOver the years it seems Elite has had a lot of good news, apparently they already have 19 approved drugs to be manufactured. But in spite of all the good news they've never achieved profitable operations in over 30 years of existence. I noted the dot com bubble in my blog piece....a lot of tech companies reported increasing revenue, unfortunately all too many of them were never able to garner enough revenue to offset expenses and so were always bleeding cash....staying alive by selling shares.
ReplyDeleteAnyway good luck in any case, I do think a spike is coming.
The greater fool is one who does not see this as a greater potential in the abuse deterrent sector.
ReplyDeleteIt is my opinion that you do not know much about the pharmaceutical sector, and even more obvious that you do not recognize the potential in a multiple opioid plug and play platform such as Elite's ADF.
The opioid of which is SequestOx (oxycodone IR) which another
poster mentioned is a $400 million drug by itself.
There are multiple NDAs which will be filed for ELI-201, ELI-202, and ELI-216 in the near future and going forward.
Shares outstanding is still on record as 695.17 million, but no matter, when going up against the hundreds of millions and billions going well into the future Elite will do very well.
Elite may dominate the ADF sector because not one pharmaceutical has anything remotely close.
One must remember that as the FDA takes non ADF opioids off the shelves those that replace them will have to have an ADF. Elite stands to be in a very enviable position with regard to possible licensing of the ADF technology to big pharmaceuticals like Purdue who will be forced to make a move in order to maintain market share. That goes with other pharmaceutical companies as well.
This is a long term hold. Elite is going to go head to head with the big boys. Those who were recently employed by Elite and left big pharmaceuticals know what they have here.
The potential is huge not only in the United States but worldwide.
OTC penny stocks often have investors who are married to their investment. Good luck.
ReplyDeleteGot my fill....incredibly risky but what the heck, it might still catch some momo. Not a recommendation by any stretch, I don't think anyone should risk money here unless they can afford to lose it.
ReplyDeleteI just read your information stated above on elite. It is a good read.
ReplyDeleteAs is too often typical of these penny stocks, there is a rabid following and they attack anyone who doesnt swallow the story hook line and sinker. Good article
ReplyDeleteit's not a good read. Check present things. Not who,what,where and why in the 90's is reference i could go on for days but why? You can tell your not open minded so = waste of time for me. If we based our train of thought on everything you just said Sirius satellite radio SIRI would not have been down to a few pennys after being a few dollars...and with more***** shares out then us and passing 1,2,3,4, dollars....and steady justs growssssssssssssss so please re-read your google search. Thumbs down. It's a growing business and medication abuse resistant technology is needed all over the world and I'm comparing it to a commercial free radio with new cars???? c'mon you have to be smarter then that...or we all need to admit this US is a sham and to worried about the greasing the wheels to make your company's products worth something.
ReplyDelete