If one takes a look at the history of Senesco Technologies and several similar organizations in the field of pharma / agricultural / other research, it seems that if they get it right, patience does pay very rich dividends. It appearst to me that this company has started to smell like a success story now. Mind you, it is a company which has tirelessly continued its research for treatment of cancer / inflammatory diseases and also to enhance agricultural productivity of fruits and other crops. It is interesting to note that it is in operation since 1999 and has continued its research activities which have nearly reached the threshold of commercialization. In a couple of years from now, it is highly probable, that its efforts, especially in the field of cancer treatment will bear fruits and lead to massive monetization of the intellectual property value latent in the organization. Surely, when their product candidates, like the one for multiple myeloma (SNS01-T), clear the final trials for treatment of cancer or inflammatory conditions, big giants will obviously try to get their hands the company. Senesco itself will try to produce and market the anti-cancer drugs which will lead to unlocking of unimaginable amount of value. Right now the stock is a penny stock which is a good opportunity to accumulate shares for participating in the blast, when it happens. The stock price is $0.16 or thereabouts. The great part is that the market cap of the company is only $18M which makes it a prime takeover target as soon as some good news comes regarding any breakthrough in its R&D. The floating stock being less than 82 million and the daily volume in excess of 190K, there is a good possibility that people are already, quietly accumulating the stock. Maybe the pot will not boil immediately, but indications are there that some thing is cooking.
In 2012, Senesco increased its focus on development of drug for cancer and inflammation. Its proportionate expenditure on human therapeutic R&D increased as compared with the expenses on agricultural research. The company press release in August last year indicated that the trials of the anti-cancer drug were progressing extremely well and the results were statistically significant. Results for inhibition in tumor growth in mice and also the curing of the growth were amazingly encouraging. These results lend confidence to the belief that the company is on the verge of achieving some kind of breakthrough. Once a major hurdle is crossed, it is anybody's guess as to how much the market will price the potential of the result. The promoters / executives have been continuously funding the operations of the company over the years and expect to reap the rewards of their patience soon. Obviously one valuation which the stakeholders would have in mind is the amount of money they have already put in (the deficit till date since inception is $67.44M). Going by that, and adding the premium of future cash flows, the price of the stock is likely to shoot up tremendously and the rise will be secular over future years. The stock is available at near zero price and the 10 day average volume is around 190K which is significantly higher than the 3 month average of 136K. The insiders and the outsiders are getting more interested. The 52 week range of this stock is 0.12 to 0.32 which itself is a good trading band. The recent equity financing of $2M was at price of around $0.10 which will act as a strong bottom for the stock. Now that investors have started expecting some news about Senesco's anti-cancer drug, the excitement is probably increasing. Investors are betting on the long term potential of the stock. $0.10 to $0.20 is a good range to enter and accumulate the stock.
Apart from its successful advances in research related to cure for multiple myeloma, non-Hodgkin B-cell lymplomas and inflammatory conditions / ischemic diseases, Sensesco can also consider foray into new human therapeutic initiatives. The companies experience in R&D over the years will definitely help it work on drugs for other diseases. The annual report for 2012 expresses confidence in the future with possible multiple uses of the cancer drug research. The Factor 5A gene regulatory technology which is the center of research, has potential uses “by either inducing or inhibiting programmed cell death”. This may be of use in curing a several inflammatory and ischemic diseases. Thus, the technology with which it is working in human therapeutic field has multiple uses. The agriculture research is in the field of enhancing productivity of various crops. With all agriculturists / governments etc. struggling to increase crop yield and improve quality, this is one hell of an arena with tremendous potential. Senesco's field trials are already in progress and the company has received some milestone payments in the past. Putting all this together, this company is working in a sector where the possibilities are limitless. The specific field of its research makes the un-lockable value more than other companies working in R&D. Cancer cure & increased agricultural productivity!! Both are on mankind's wish list since a long time. The stock is likely to be a multi-bagger and the march is likely to begin soon. Breakout is expected anytime now. People are getting interested (the recent volume surge says that). Best is to put in a small amount of money and hope that the multi-fold rise in value will help convert hundreds into thousands and millions. The multiplier effect will be most if the stock is bought at these levels. Alternatively, a systematic investment over the next few months would make the accumulation more structured and price efficient.
The Q4 & fiscal 2012 results are likely to be declared soon. In the last quarter,sales training twelve months (TTM) basis were $9.90M with majority of the revenue coming in the most recent quarter ($3.63M). In fact, sales in Q312 were double those in Q311. Gross profit in TTM $2.47M with 50% of that (~$1.254M) coming in Q3 itself. The net loss for Q3 came down by around 36% as compared with 2011 (from $2.4M loss in Q311 to $1.53M loss in Q312) The jump in sales was attributed to the good response received for its new product line, BluScience. BluScience is a dietary supplement product line. If the non-cash expenses are excluded, net loss narrowed to $612K for Q312. The inventories were $5.4M and the cash in mrq was $1.24M. The debt in books of Chromadex is $225K.
Phase 2&3 trials of pTeroPure have shown encouraging results with statistically significant results in reducing blood pressure in adults. This product presents a good opportunity for company to enter into licensing arrangements for product development at the appropriate stage. Analysts Aegis Capital & Dawson James have initiated a buy on the stock with a one year target of $2.63. This target looks pretty steep now (current market price of ~$0.70) but if the Q412 is anything like Q312, a decent growth is definitely possible. The stock is about to cross its 200DMA of $0.69. It is already trading above its shorter term averages like 50DMA of $0.60. $0.40 to $0.50 has acted as a very strong bottom for the stock in the last one year (triple or more bottoms). The 52W range for the stock is $0.44 to $1.25 which itself is a good trading opportunity. Ten day volumes have seen a 15% jump compared with the three month averages. Price has increased by 36% over the last one month. If the Q4 is good, one can anticipate a good jump in the stock price.
It is good to see Dr. Phillip Frost increasing his interest in Pershing Gold recently (through Continental Resource Group). Frost is known to pick golden cherries before they germinate. He has invested in companies like Whitman Education, North American Vaccine and the like with returns in excess of 13X. His faith in Pershing Gold indicates that this relatively new company has some promise based on its assets. In fact, the owners have pumped in more than $28M in the company in its few years of existence on the belief that efficient mining of gold is likely very soon. The cash flows expected based on the reserves indicate that, in case things move as planned, the company valuations will move up and the stock price will obviously catch up with that. One has to keep in mind that the company is only 3-4 years old and the gold mining business requires patience for much longer period. As per the company's website, the assets of the company have the indicated and inferred resources of 248,000 oz. of gold in its main property, the Relief Canyon Mine. These estimates are likely to be revised upwards to around 700,000 oz. based on NI-43-101 compliant technical report. The initial target of production is 50,000 oz of gold per year starting from 2014. Strategic property consolidation of the company provides it with control of more than 25,000 acres of land in the Relief Canyon mine area alone. This potential of mining gold is the basis of optimism of investors. Many believe that the company which is right now investing money to develop its assets, will reap the rewards sooner than expected. PGLC stock,which is presently trading around $0.50 can be a good long term bet. Investors should, however, keep a watch on what the management and other independent analysts say from time to time about its strategic decisions and the actual progress in mining.
Pershing has recently located 105 unpatented mining claims and acquired around 635 acres of land on lease basis in its main asset (Relief Canyon, Nevada). Based on this, total around 2600 acres of land has been added to PGLC's land bank. According to the company CEO, these lands have been identified through scientific methods by its technical experts for having very good mining potential. Landholdings were around 1500 acres in August 2011 when the company started the acquisitions and presently such assets are in excess of 25,000 acres. As per the recent press release in Jan'13, the mines have 463,000 measured & indicated and 101,000 inferred ounces of gold. In 2012, PGLC spent around $5.3 million in exploration costs and the estimates for 2013 are around $3.6 million. In addition, re-commissioning of the gold processing facility on the Relief Canyon mine site is likely to cost around 2.6 million. For 2013, it is planning a development drilling program to upgrade identified areas adjacent to the mine to resource category and start an exploration drilling program to test areas surrounding the mines. PGLC is planning to modify its existing exploration permits to allow drilling outside its resource boundary. All these expansion plans will obviously require a lot of funding. Presently, the balance sheet is not too leveraged and the funds are coming from owners / directors (e.g. Barry Honig put in more than a million in January). Even outsiders like billionaire investor Frost are buying stake, albeit indirectly. Sources for the funding in the future are likely to be external till the production starts (likely next year). This, in fact, will be the real test for the company. Once it starts, things will obviously get easier for the company whether it is getting funding or servicing its moderate debt. Hopefully, the company will fulfill its promise and production will start as per schedule. If that happens, the stock can become a multi-multi bager for the patient investors.
Yesterday's price movement in this stock was interesting. The stock opened around previous close of $6, went down to $5.46 and rebounded to close at $5.75. Importantly, intraday, it breached the 200 DMA (~$5.7) and managed to rebound to close above it. Of course, it lost ground compared to the last close but the increased volumes of around 50K shares compared with the average of 31K showed some excitement. MSLP is still trading above the 50DMA of 5.10. However, the next few days will be crucial to see whether the 200DMA will hold or not. If it does, and with increased volumes like yesterday, then it would appear that the stock has completed 50% retracement of its recent move from around $4 to $7.8 or so. Mind you, the stock is still up by more than 50% from the price a month ago. The 52W high / low is $3.90 / $8.50. The stock is far away from both these levels. The letter to the shareholders written by the CEO yesterday could be the reason for the volatility. It seems that people could have been more positive but the intraday breach of 200DMA scared some of them. It is probable that the recent lows of around $4.0 are likely to be the near term bottom for the stock and any revert to that level should be a good buying opportunity. This is because all this (100% move from $4 in February) was backed by good volumes as some big investor bought a big chunk. Thus, two immediate support levels exist and are important. The 200 DMA and the 50 DMA. $5.0 is anyway a round figure which could add a little more strength to the short term average. After that $4 is a very strong support as the charts indicate several bottoms over the past few months at that level.
Falling price of a stock on dwindling volumes usually indicates that the intensity of selling is coming down. Hopefully, this is the story of the price decline of Pershing Gold during the last few days and the stock will find support around $0.42 odd levels. This is a retracement level zone which should normally hold. The next support below that is $0.39 which is the 200 day moving average. This is very close to $0.35 which is the base on which the stock took off recently. Of course, it all depends on the news flow, especially related to the start of production, and the management commentary emanating from the boardroom. The results of the recent tests regarding the indicated & inferred ounces of gold in their properties do provide hope for turn of fortunes for the company. Value at $1650 per ounce for the 463,000 ounce of indicated and measured ounces comes to $759M. This is astronomical compared with the size of the Pershing balance sheet. Now if the gross profit margins are taken to be around 20%, the impact on the cash flow is easy to estimate. Of course, this will not happen overnight and will take years. The first expected milestone is the start of production in 2014 (as per the management's promise). Once that hurdle is crossed, the calculations and the estimates will get more fine tuned and the real picture will emerge. In any case, if the scientific data is to be believed, if PGCL is able to efficiently mine gold then, it will literally be sitting on a gold mine. So far, the management has delivered what it has promised. Perhaps this trend will continue and the patient investors will get rewarded. In addition to this, the long term bull market of Gold will help cover for increasing mining costs over the years to protect the margins.
The recent letter to the shareholders by the CEO of Muscle Pharm underlined the company's focus and desire to turn around and improve its cost structure. Without controlling the cost, the exponential growth is of little use. As mentioned in the communication, the debt is being reduced and the supply chain inefficiencies are being tackled. Further, the reason for recent consolidation (1:82) of shares was clarified. Basically the intention is to improve ease of receiving equity funding from institutional investors by getting listed on major stock exchanges. As per the management, the listing is likely to happen within 2013, in fact, after the first quarter results are declared. Sales in 4th quarter of 2012 was around $27M which indicates that the rate of growth is still breathtaking. Now that cost control is on top of the agenda, the company seems to be getting on the right track. Better operations management will help improve gross margins. Reduced debt (in fact, zero debt) would mean very low interest payments thereby improving net margins. Further, a debt free company is more likely to attract equity investment, and at better terms / rates. Both these combined together would reduce working capital requirement thereby reducing funding requirement. Regarding reducing costs, one suggestion could be to focus more on the segments or markets where the costing is better and reduce presence in other, less favorable markets. One-fifth of the sales of MSLP come from overseas markets. The timing of the letter and the mention of possible listing on the exchanges immediately after upcoming results in April indicates confidence of the management on what can be expected. In Q1'13, the balance sheet can be expected to be cleaner and some improvement on the margins front can be expected. Perhaps, the MSLP management knows this and is planning to leverage the changed scenario to attract investment from some big guys (again).
With the nutraceutical segment market growing at a healthy rate, the expected size of the market in 2015 is $243B. Chromadex, which supplies phytochemical reference standards (small quantities of plant-based compounds for research) is on a growth path as far as the volumes are concerned. The launch of BluScience range of dietary supplement products has been successful and has given further fillip to its sales. The range contains pTeroPure (pterostilbene) which is CDXC's proprietary patented product. PteroPure has been found to be helpful in blood pressure. The technology has been licensed from University of Mississippi and the USDA and the product can also be used for memory improvement, anxiety, and neuro-protection. It has been hailed as a very promising ingredient with potential of around $500 million in sales. Other compounds in pipeline are C3G, an anthocyanin, or nicotinamide riboside (no-flush vitamin) which have commercial potential. Regarding its expansion plans, Chromadex plans to increase R&D and sales / marketing efforts. The rising sales have, however, not translated into profits which is the main reason for its financial woes. The company is now focusing on cutting costs to reduce working capital and capex requirements. Expected sales in Q4'12 are likely to be robust and the improved cost structure is likely to help the company reach closer the the break-even point on net basis. Thankfully, the company has very little debt on books ($ 225,000). The interest payments are, hence, very low compared to the sales. Thus, CDXC would do great if it could concentrate on reducing its General & Administrative expenses which comprise of majority of its expenses. Insiders are holding 44% of the company stock which indicates some amount of faith in the future prospects. This stock, which is currently trading around $0.80 and $0.69 should act as a support as it is the 200DMA. CDXC can be bought within this range.
The organization MusclePharm has been built by athletes and hence they know what is required by consumers of this market. They have first-hand experience of the problems and long term requirements of the athletes. They are in touch with the athletes and hence know the dynamics of their needs. It has a Research and Development facility and Sports Science Center which helps test and tune the products. The company uses the web / social media to reduce marketing costs etc. In August 2012 the company's product Assault was declared as effective in improving muscular strength without hindering cardiovascular performance. This was based on trials conducted by The United States Sports Academy (USSA), an independent, accredited university. The product was found to be to promote increases in muscular endurance, energy, choice reaction and agility. With the economy expected to turn around over the next few years and debt / selling costs of MSLP likely to come down, the company will hopefully become profitable over the next few quarters. In fact, Q412 results will give a good indication as to the future of the organization. Last quarter sales were extremely robust and the projected turnover for 2013 is $100M. This will be a 28% rise over the 2012 figure of $78M. The ultimate target is $500M, as mentioned by the CEO in his latest letter to shareholders. In fact, as per the letter, the company used the proceeds of its recent offering ($12M) to repay the debts and MSLP is now debt free. If the profit margin expands, this turnover could translate into meaningful EPS for the shareholders. Basically, the brand and the products are doing OK, top management is extremely conscious of improving the cost structure, and shares are expected to be listed within a few quarters. All this put together supports the likelihood of an uptrend in the stock over the years.
It seems that CDXC stock has resumed its up trend. Minor glitches apart, the next stop would be $0.90 and $1.25 (52W high). Once this is crossed, $2 and beyond are possible. This majorly depends on the results over the next few quarters. The market is growing at an average compounded annual rate of around 7% and the size is also huge. With experience in the industry, it is not too difficult for Chromadex to get its share of the pie and also increase its size over the years. Of course, the company has to keep its marketing efforts on full throttle and also sharpen its market intelligence skills. Future development also depends on creation or upgradation of more R&D facilities / clinics etc. All this requires funding and CDXC has been professionally fortunate to get the money from cash flow and equity funding over the years. The insiders who hold more than 44% of the stock have been regular contributors and it is for this reason that the debt on books is very low. This reflects the confidence of the owner managers in the prospects of products / technologies where CDXC is operating. Future expansion is also likely to be based on this funding route. To list on major exchanges, its would be great if some sort of consolidation can be explored. That may enable institutional investors to participate in the growth story of the company. The fourth quarter results are going to be declared soon and it is likely that the growth trend continues. What would be interesting to see is whether the company manages to increase its gross profit from $1.24M in Q3 or not. The good response to BluScience is expected to continue but hopefully, the selling / marketing expenses would come down. At the time of launch, the expenses were obviously very high which dented the margins in the last quarter and spoiled the party.
Continental has been holding Pershing shares since July 2011. At that time Pershing purchased assets of Continental through a deal where shareholders of Continental were given shares of PGLC in a ratio of eight shares for every ten shares of Continental. Now, as a logical and legal consequence, they have jointly announced that Continental has set March 1, 2013 as the record date for Continental's dissolution. CGRC's liquidation will start shortly thereafter and the distribution of Pershing common stock to Continental shareholders will also take place subject to regulatory approvals. Continental's shareholders have already approved the dissolution in 2011. This will help completion of the deal and will combine the two entities totally. Now that the stock is nearing its 200DMA of $0.40, it is possible that some sort of rebound will take place. Historically also, the $0.30 to $0.40 levels have held with strength and are areas where investors tend to accumulate. It can be a good idea to do that keeping a stop loss at the lower end of the support zone. With management confidence that production of 50K oz of gold will commence within less than one year from now, it is sensible to keep patience at these long term lows. Dr. Frost and other big fishes are also likely to find it attractive at these levels specially after the dip they have taken a few weeks back. All this put together signals that the possibility of a bounce back to short term highs is highly likely. Of course, $0.49, the 50DMA which is very near the $0.50 round figure level, is likely to provide resistance to the stock on its upward journey. Beyond the $0.55 levels, the next stop will be $0.75 and $1.05. That seems a little far but if there is traction at 200DMA, all this may happen sooner rather than later. Let us watch closely.
MusclePharm has received the 2012 GNC "Rising Star" vendor award given by GNC in the sports category. GNC is the largest specialty retailer of health and wellness products in the U.S. The award was given on the basis of strong sales growth in relatively short time period. This award is also indicative of the tremendous future potential of the products of the company and also suggests that the marketing efforts of the company are on the right track. MSLP sells its products like Assault, Combat Powder and Bullet Proof through GNC. The success of these and more products have led to the company achieving exponential growth from $1M a few years back in 2009 to $78M in 2012. The target for 2013 is $100M and based on past performance, this figure may not be too difficult to achieve. What is important, however, is to achieve profitability immediately. Now that the balance sheet of the company is cleaner (zero debt) and the selling and distribution costs are being controlled, it is expected that the runaway success of its products will get translated into earnings per share for the shareholders. The 2012 last quarter results are expected on 15th April. It is expected that the financials will present the company in very good light. It will be leaner and more attractive for investors based on its balance sheet strength. This is especially possible because the market capitalization is less than half of the 2012 sales. If the $100 million target is achieved in 2013 and margins are also better, this gap is likely to become less, leading to a price catchup by the stock. In any case, the company run by athletes is well positioned to deliver quality products. What was missing was the focus on cost control and presence of expensive debt funding. Hopefully, Q4'12 and Q1'13 will be landmark quarters in the history of MSLP with marked improvements in the financial metrics.
Chromadex has announced that it has entered into a letter of intent to sell its highly successful BluScience consumer product line to NeutriSci International. The CEO stated that while the launch of the product helped enhance the awareness about pTeroPure, selling the product to NeutriSci would help better consumer product marketing to further increase the popularity of the BluScience. NeutriSci plans to sell the product in the Southeast Asia Market in addition to the North American market. The company has a very good network in SE Asia. The total transaction is valued at approximately $6.0 million and will consist of a combination of cash, senior secured debt and an ownership interest in NeutriSci. ChromaDex will continue to get royalty on future net sales of BluScience products and also there is a supply agreement with NeutriSci for the patented pTeroPure pterostilbene. The rights of this patented product will remain with ChromaDex. At the signing of the LOI, CDXC received a $250K deposit as earnest money. The closing of the deal is expected to occur before March 31, 2013 subject to usual conditions. As per the CEO Jaksch, the sale will allow CDXC to focus on selling and marketing pTeroPure ingredient and increase focus on developing and commercializing new ingredients. This deal will obviously improve the cash flow of the company as the $6M payment will be a substantial boost to the balance sheet. Remember, sales (TTM) in 2012 were $9.9M. Further, the sales royalty will become a continuous source of revenue without any significant expense. Further, sale of the ingredient to NutriScience for manufacturing of the product will also add to the cash inflow. So the effort put in building the BluScience brand has paid off and this can be a game changer. Chromadex is trading above both its 50DMA & 200DMA. Recent uptrend is now easy to explain. Today's movement will be interesting.
A recent Forbes article on MSLP compares it with Schiff Nutrition International (NYSE:SHF). This company has a net profit margin of 6.4% and a P/E multiple of 16. MusclePharm, on a estimated sales of $100M for 2013, on similar parameters would realize a net profit of $6.4M. With 5.97M shares outstanding, this would translate into a price of around $17.15 which is a growth of more than 211% over the current market price of $5.5. The sales growth of MSLP is more than robust, and with increased focus on profitability, the probability of increase in stock price is very high. The segment where MSLP operates, the fast growing specialized supplements market, helps it sustain the strong growth momentum. CEO of MusclePharm has a goal of $500M sales within the next few years. Calculating with a 10% margin, this would translate into net profit of $50M i.e. a price of $133 at a conservative P/E of 16. With good brand recall and expected profitability on net basis, all this may be possible to a great extent. The intended listing within 2013, after the Q4'12 results in mid-April, will force the company into developing a palpable strategy to walk the talk of profitability. All said and done, it boils down to becoming EPS positive. Rest of the things like easy funding, better valuations, good PEG potential etc. will follow. The first quarter of net profits may also attract attention of bigger players looking for an entry or consolidating their position in this fast growing segment. A zero debt company with more than $100M in sales would be a good candidate for takeover. The good part is that MSLP has maintained its focus on research & development which is ever so important in this sector. Hopefully, it will be able to maintain its competitive advantage through newer and better products.
Yesterday's move of MSLP should give confidence to traders and investors who will notice the strength of the 200DMA and the 50DMA. The stock has finally crossed $6.0 after about a month. The next level to watch out is $6.5 and it is expected that, if volumes rise, this may happen soon. A fresh march to the recent highs of $8.0 may then begin. It is important to note that the volume yesterday was nothing great (almost a third of the 3 month average). So one should keep a watch on any major change in that metric. Of course, if $6.5 is crossed and held for a few days, then the confirmation of completion of retracement, and beginning of uptrend will be there. Signs are there, and the fundamentals are also changing for the better as Muscle Pharm is beginning to do better things on the profitability front. Cleaning of debt from the balance sheet and cost cutting, through innovative methods of marketing / selling by use of social media, will make the 4th quarter of 2012 and the 1st quarter results of 2013 a very interesting read. With full year tentative figures of $78M for sales for 2012, and projection for 2013 being $100M, these results will make the investors understand whether the management is working towards fulfilling its promises. If the net margins turn positive, then the stock will not look back easily. Perhaps some insiders already know that the tables are about to turn and hence are accumulating at every dip. No wonder, timewise, the retracements do not last much. Further, the listing in Q2'13 will give a fillip to the stock fortunes as the volumes will improve. Other big investors will like to have a slice of the pie. In fact, this year will be significant for the company. If the management walks the talk, investors will be rewarded.
Yesterday's rebound, from a dip to the 50DMA to a close above the 200DMA, indicates that the stock has perhaps bottomed out in the near term. Over the past few days, dips to these two averages have been followed by a bounce back on the same or the next day. Thus the retracements are not lasting for too long. Repeated close above the 200DMA also signals that now the 0.90 level is the one to watch. A cross above that will take CDXC to the recent highs of about $1.2. All this will not happen too fast but if the results of Q4'12 beat expectations, the upswing may gather momentum. It is also possible that the management gives out more details of the BluScience sale deal with NutriSci International. The likely benefits of the $6M sale will help investors calculate the real effect of the deal on the company balance sheet. The deals comprises of $250K payment (already received), debt, stake in NutriSci and most importantly, royalty payments. If this cash trickle is expected to be substantial, then the other operations of company are likely to become smoother. The success will also encourage it to develop better products / compounds and the research & development efforts will become more robust. As the deal is likely to be closed within this month, the details should be out any time now. CDXC's future may change for the better and, consequently, the stock will also become stronger. What is interesting to note is the CDXC will retain the rights over its patented product pTeroPure pterostilbene and hence NutriSci will have to buy it from Chromadex for making BluScience. Selling of this product through NutriSci will help it reach hitherto untapped markets (SE Asia) and the cost of selling / distribution will come down substantially. Thus the royalty payment for CDXC may be more consistent.
Yesterday's move in PGLC indicates that the $0.40 level is likely to hold for two reasons. Firstly, it is the 200DMA which is always a strong level to cross, whether it is on the upside or on the downside. Secondly, the base below that ($0.30 to $0.40) has been a very strong support. Thus, it has been taking a U turn as soon as it approaches that level. Another point is that the 50DMA is $0.50 which will provide the first resistance on its upside move. It is evident that the 50 DMA is above the 200DMA indicating some amount of technical strength. What it has to do is hold these levels, consolidate and ultimately break out of this range of $0.40 to $0.45 / $0.50. This has not happened because the volumes have been anemic (10 day average is half the 3 month average). Now that the consolidation phase is about to be over, the volumes are likely to pick up. In fact, that will be the first signal that something exciting is going to happen. Till this changes, breakout appears difficult. The odds of a uptrend have increased after the management recently expressed its desire to list on major exchanges within this year. Any investor who has faith in the future of Pershing Gold, will not like to miss this bus (maybe rocket). In 2014, the production may start which will change the cash flow dynamics of the company. PGLC will also discover more clearly how much gold its mines may hold. Then the valuation of the enterprise will become more objective and the price of the share will catch up with that. Usually, these mining companies take years to start delivering and, if PGLC is about to start production, there can be merit in buying the stock for the long term. The next few weeks should be very interesting to watch.
The agenda items in the proxy (annual meeting on 28th march) include a proposal to increase authorized capital and also go for a reverse split to consolidate the shares. If approved, these two changes would make the stock price increase due to consolidation and soften due to dilution. The split is likely to be around 1:20 otherwise it would not be of much use as the current market price of the stock is $0.09. Based on this ratio, the overall impact of these two changes put together would make the stock price go up substantially. The inherent value remains the same but consolidation usually brings in bigger investors into play and the volume of trading in the stock increases. This in-turn helps in getting more investors / trader participation, and the cycle continues, subject, of course, to fundamental strength or potential of the company. The increased price of SNTI may make a future listing on NYSE or other exchanges easier. Now, all this is fine but, as mentioned above, what matters is the business prospect of Senesco. Results of its research in treatment of cancer / inflammatory diseases and also in agriculture to increase productivity of fruits & other crops has been encouraging. Their product candidates, including the one for multiple myeloma (SNS01-T), have shown promise in initial trials with statistically significant results in inhibiting growth and curing of tumors in mice. In addition, the progress on the agricultural research front is also good and it has already licensed its products to agricultural companies which are conducting field trials. However, the main focus is on the human therapeutic research as that has relatively more potential. So far, the founders / promoters / managers / scientists (insiders) have funded operations and, in case outside funding is tapped through the equity route, things may get easier for the company.