Repro-Med Systems, Inc. (OTCMKTS:REPR) With a Nasty Slip-Up
Repro-Med Systems, Inc. (OTCMKTS:REPR) is a penny stock and like most penny stocks, it has been covered by people who have said that investing in it is a great thing to do. In this particular case, the people behind an entity called Geo Investing first told their subscribers about REPR back in October 2014, and by the looks of things, they still maintain their positive view on the company. They even hinted recently that they have a position in the stock which could grow in the future.
Unfortunately for REPR‘s shareholders, Geo Investing’s opinion doesn’t seem to be affecting the market sentiment all that much. In fact, the ticker was rarely seeing more than 10 trades per day during the first half of 2015. It was hovering around the $0.40 per share mark and it was showing no indications of moving up or down.
Yesterday, it did see some volume, but instead of pushing it up, the increased activity dragged the ticker under. After a significant gap down at the open, REPR went on to hit a 52-week low of just $0.20. It then bounced, but it only managed to reach a close of $0.315 which is a hefty 14.8% below the value at the end of Monday’s session.
Perhaps more worryingly, yesterday’s drop wasn’t caused by anything immediately obvious. The latest press release is now almost six months old and although Geo Investing are writing positive things about the company, they aren’t really in the business of organizing paid promotions.
The only thing that could be affecting investors’ mood is the latest 10-Q. It covers the three months ended May 31, it was published a few minutes after the closing bell on July 10, and it looks like this:
- cash: $2,470,636
- current assets: $6,026,584
- current liabilities: $904,210
- quarterly revenues: $2,630,545
- quarterly net loss: $64,640
You can see why Geo Investing like the company. REPR is well out of the development stage and it has managed to protect its balance sheet from the dreaded toxic debt. That’s not something you see every day in the world of penny stocks. Unfortunately, it’s not all good news.
The revenues registered between February 28 and May 31 are a tiny bit smaller than the ones logged during the corresponding quarter of last year. On a quarter over quarter basis, however, the drop is much more substantial – 23%. In addition to this, this was the first quarter in a very long while that ended with a net loss.
Still, it’s not too bad and the management team said in the 10-Q that they’re implementing a restructuring strategy which should ultimately improve profit margins. They also promised that cash in the bank won’t be a problem for the time being.
In light of this, you might be thinking that yesterday’s drop has actually resulted in a good entry point. And you might turn out to be right. Don’t forget, however, that the stock had some rather horrific liquidity problems not that long ago.
