Millennium Healthcare Inc (OTCMKTS:MHCC) Drops Despite Positive News
Let’s start today’s article on Millennium Healthcare Inc (OTCMKTS:MHCC) with the management team. The company is headed by Dominick Sartorio and a person by the same name was once at the helm of a private entity called M2 Technologies Inc. While he was there, Mr. Sartorio had some legal problems.
We don’t know what happened to M2 Technologies and we can’t even be sure if Mr. Sartorio of M2 Technologies and Mr. Sartorio of MHCC are one and the same person, but if that’s the case, his current venture is doing much better than the old one.
About a month ago, MHCC was hovering around the $0.40 per share mark and it was experiencing some increased volumes. Investors were excited because the management team had announced that the revenues for the third quarter of 2014 will amount to around $6.4 million – a massive leap both on a year-over-year and on a quarter-over-quarter basis.
The 10-Q came out on November 14 and it revealed that the estimates had been spot on. That wasn’t the end of the good news, however.
During the conference call discussing the Q3 results, MHCC said that they will launch a new medical device in a couple of months’ time and promised that it should deliver the same sort of sales figures as the OralCDx and VasoScan (the products that helped with the gigantic revenue boost). Last week, they also announced the appointment of Paul Antogiovanni to the management team and said that he will help the company grow even further.
MHCC also admitted during the conference call that they are struggling to keep up with the demand which, on the one hand, is an issue. On the other, however, it means that the devices are well accepted by the people who use them, and that has got to be massively good news for the shareholders.
All in all, the people who are invested in MHCC have been presented with numerous things to cheer about over the last month or so. Unfortunately, the stock performance isn’t one of them.
As we mentioned already, just thirty days ago, MHCC was hovering around the $0.40 mark. Right now it’s sitting at just over $0.20 and the 52-week low of $0.19 from Tuesday suggests that even these support levels might give way in the near future.
The reasons for the serious drop are not that difficult to find, actually. All you need to do is take a closer look at the Q3 report. While the revenues have indeed grown significantly, the rest of the statement leaves a lot to be desired. Here’s a snapshot of the most important figures:
- cash: $178 thousand
- current assets: $9.6 million
- current liabilities: $14.5 million
- quarterly net loss: $3.8 million
It is painfully obvious that MHCC still have quite a lot of problems to solve, and although many people argue that they are all caused by the fact that the company is still in the initial stages of its medical device business, the majority of investors don’t seem ready to jump in just yet.
Of course, some of you might say that the current levels are actually presenting a great entry point, and we should note that if MHCC manage to sort out all the issues, the people who are placing their buy orders right now might be in for quite a ride.
Don’t forget, however, that potential dilution could hamper the progress. And as we mentioned in our previous articles, MHCC‘s printing press has already churned out quite a lot of stock. Extensive due diligence is, as always, absolutely essential.
