Fresh Healthy Vending International Inc (OTCBB:VEND) Steps Back Onto the Scene
If you go through Fresh Healthy Vending International Inc (OTCBB:VEND)’s SEC filings, you’d probably think that the company isn’t the best candidate for a stock promotion. After all, the small cap entities that receive the pump treatment are, more often than not, a development stage enterprises with nothing more than big plans for the future and even bigger zeros in their financial statements. By contrast, VEND is a revenue generating company with seventeen full-time employees and a rather interesting business plan.
Despite this, the ticker got pumped back in November and, as you can see from the chart, the results were truly catastrophic. Touting was done through the snail mail only and the total budget amounted to $1.3 million. The pumpers picked up VEND when it was hovering around $1.50, managed to push it up to a 52-week high of $4.05, but then abandoned it which resulted in levels below $2.
Left to its own devices, it managed to regain some of the lost ground but the small trading volumes suggested that people simply weren’t ready to trust the company once again. This seems to be changing.
Yesterday, VEND jumped up by around 6% while shifting more than 300 thousand shares. The volumes aren’t nearly as big as the ones registered during the peak of the pump, but they’re still quite significant. It seems that, despite the devastating performance, investors are willing to give the company another chance. And the latest press releases suggest that VEND might actually deserve it.
On Monday, for example, they announced that December has proven to be the strongest month of 2013. Alex Kennedy, VEND‘s CEO, said that around $870 thousand in sales have been registered in just thirty days and informed investors that, with recent law changes now taking effect, the company could be in for an even brighter future.
Without a doubt, Mr. Kennedy seems to be mightily optimistic, but are his promises alone enough to bring investors back?
Unfortunately, the answer seems to be negative. Traders are reporting that a new hard-mailer campaign with a total budget of $1.8 million has started on Monday and there are even some pictures flying around.
At $2.25 per share, VEND still has a lot of room to drop and it’s clear that, at least for the time being, the $57 million market cap is a bit of a stretch for a company that has no more than $231 thousand in the bank and a $2 million working capital deficit.
Still – you’re thinking – the pumpers will eventually go away and once they do, the ticker should put up a more stable performance, right?
Time will tell, but we’ve seen already that the interesting business plan alone might not be enough to support the current share prices. What’s more, the company has some rather big red flags flying around it. They have had some problems with the regulatory organs which resulted in a 15% decrease in revenues year-over-year. This document shows that they’re currently banned from entering franchise contracts in the state of Washington and it also reveals that one of VEND‘s directors, Nicholas Yates, has been found guilty of “misleading and deceptive conduct regarding the operation of pre-paid phone card and vending machine distributorships” by the Federal Court of Australia.
All in all, VEND is one of the more curious stocks in Pennyland. Unlike other pumped tickers (Tiger Oil and Energy, Inc. (OTCMKTS:TGRO) and Centor Energy, Inc. (OTCMKTS:CNTO) are prime examples), VEND has running operations. Despite this, the pressure from the pumpers, the horrific stock performance, and the shady past of people from the management team certainly warrant some extra caution. Doing a lot of due diligence and evaluating the risks carefully is absolutely essential.