SafeStitch Medical, Inc. (OTCBB:SFES) Chugs Upward to $1.72
The climb of SafeStitch Medical, Inc. (OTCBB:SFES) is becoming dizzying. The ticker added a further 10% on Monday, reaching $1.72 on volumes above $421,000. The trend that started at the beginning of August was boosted by financial results coming in on August 21st, and now the ticker has had seven trading days of buying and gains.
And all of this without the boost of a promotion, underlining the difference between different medical industry penny stocks. SFES has a promising supply business of specialized surgical mesh materials used in bariatric surgery and hernia repairs. This brought it to its latest financial filing, containing:
- $1.026 million cash
- $2.6 million total current assets
- $667,000 total current liabilities
- $960,000 quarterly loss
- $31 million accumulated loss since inception
With quarterly revenues of a few thousand dollars, it seems SFES is still not established well enough among medical practices, and it competes with existing producers. And while the company is still holding up financially, this is no guarantee that the relatively high share price, even for an OTCBB tier stock, is securely supported, especially at the peak of an upward trend that could end any day in profit-taking.
To compare, Arch Therapeutics, Inc. (OTCBB:ARTH) is a riskier bid, a heavily promoted company that splashed into trading, moved to peaks around $1.40, but as the promotion slowed down retreated to 38 cents.
And in the case of SFES, the company trades with unprecedented volumes in the past two months, and was quickly lifted to levels not seen in about two years. Most tickers at this position would cause jitters and profit-taking, so we are not excluding this possibility for SFES happening soon.
In the medical and pharmaceutical field, tickers often command loyalty and stay among the heavily traded group for months, as it was the case for SFES. A typical high-loyalty bid is Advanced Cell Technology, Inc. (OTCBB:ACTC), a stock that is now slowly losing steam, and moving down the infinite steps between 7 and 6 cents. A recovery may be possible, but ATC has been depressed in the past months.
If you still like SFES for its longer-term potential, keep in mind that medical sector stocks test the patience of investors with a long path leading to viable marketing. It is possible that SFES may deflate,much like the ACTC graph. Do our own research and plan your loyalties according to the investments you can afford to lose.