Cord Blood America, Inc. (OTC:CBAI) See-Saws Up Again
If you want to get on the see-saw, wait till the seat is low. But for Cord Blood America, Inc. (OTC:CBAI) you may have missed the moment. The choppy movements of this double-zero stock take it up 100%, only to be followed periodically by deep corrections that wipe out the gains. 
The engine for the latest leg-up of CBAI is the recent announcement of financial results. Here are the resources so far that should help CBAI: 
- $393,892 cash
- $5.8 million total liabilities
- $5.99 million revenues
- $3.4 million net loss, almost 50% below net loss for 2011
It seems the optimistic trend of narrowing losses gave some confidence, despite the fact that CBAI is still burdened by debt. The company has a long time horizon for predictable revenues, as it collects regular payments for harvesting and preserving stem cells. Also, the company doubled its cash reserves and achieved a positive cash flow from operations, giving hope for long-term potential. The company announced a 35% increase in revenues from Argentina, which means enough long-term deals to provide annuity-like payments in the future. Stem cells are usually preserved for decades, for a small but regular fee.
On the downside, CBAI is extremely underpriced and prone to fluctuations. Also, its industry is niche and the business model may not be visible enough to invite a larger circle of investors, beyond the regular penny stock crowd. The promotion in the past weeks, ending March 21st, only added to the volatile and disproportionate movement of the stock.
Since it abandoned CBAI, the pumper Stock Hideout is catching up by participating in the promotions of several extremely noisy tickers. Among them is Creative Edge Nutrition, Inc. (OTC:FITX), as well as Terra Tech Corp. (OTC:TRTC). As it is easily seen, CBAI is rising again only because of press releases and bargain buying, and the end of a promotion is usually when a ticker sheds a large part of its value.
If you choose to take up an underpriced ticker, especially a double-zero selection, keep in mind the risk of volatility and research the company before believing the hype of a pumper. In case of disparities between a company’s business potential and its stock movement, it is best to keep in mind the right time horizon and acceptable losses.
