Scott’s Liquid Gold Inc. (OTCMKTS:SLGD) Shines Again
Scott’s Liquid Gold Inc. (OTCMKTS:SLGD) is a penny stock company, but unlike most penny stock companies, it’s a real, working entity with a real office and real products. It has been around for decades, its wood cleaners and preservatives are on the market, and, at least to some extent, they are well recognized.
The 10-Q for the second quarter of 2015 is pretty decent as well. Here’s a summary of the most important figures:
- cash: $8.6 million
- current assets: $12.5 million
- current liabilities: $2.2 million
- quarterly revenues: $7.3 million
- quarterly net income: $3.4 million
Those of you who have been around penny stocks for long enough will see that SLGD has one of the more solid balance sheets in OTC Land. Both the revenues and the profits are growing which is also a good sign.
Yet, the stock performance doesn’t really suggest that everyone is convinced. Indeed, there are volume spikes such as the one from Friday when investors traded more than $200 thousand worth of shares and indeed, the stock is now sitting at $1.50 for the first time in years. Overall, however, the volumes are absolutely pitiful and despite the positive results, the market doesn’t seem impressed at all. Here are a few of the potential reasons for this.
When they hear about Scott’s Liquid Gold Inc, most people immediately think about the household products that consist of wood cleaners and preservatives. In reality, however, more than three quarters of the company’s sales come from skin and hair care products. And most of those are the result of sales of Batiste Dry Shampoo which is actually manufactured by Church & Dwight Co., Inc. (NYSE:CHD), and not by SLGD. In other words, a massive portion of the company’s business is dependent on a single distribution deal.
That’s not particularly encouraging and neither is the fact that the company’s management team isn’t particularly popular with some of the shareholders. In fact, there have been some pretty big rows between certain investors and Mark Goldstein, SLGD‘s CEO, over the years, and although that’s in the past now there are people who still think that Mr. Goldstein isn’t working in the shareholders’ best interest.
Others, however, reckon that the stock is so undervalued, that all the negative things don’t matter. One such person (who admits that he owns some stock in SLGD) wrote an article on a popular financial website and thanks to his bullish comments, the ticker experienced the volume spike that we talked about a few minutes ago. The author of the aforementioned article predicts that once the market notices the company’s potential, the stock will have no problem taking off.
That, unfortunately, is where a potential hole in his argument might lie. SLGD is certainly no newcomer. The ticker has been around for donkey’s years, but despite this, it has been consistently failing at drawing investors’ attention.
Will it be able to attract some more steady volumes in the future? We should soon find out. It’ll probably need something more than a positive article on a financial website, though.
