Transgenomic Inc (OTCMKTS:TBIO) with a Scary Correction
If you are looking for a ticker suitable for a quick day trade and an easy profit, Transgenomic Inc (OTCMKTS:TBIO) is probably not for you. A glance at the historical data reveals that trading volumes are generally quite low and the price seems somewhat reluctant to make big jumps towards the higher end of the charts.
TBIO is probably not your best bet if you like playing paid promotions as well. In fact, this is one of the few penny stocks that has absolutely no entries into our database. But it is still a penny stock and it still manages to surprise traders every once in a while. On Wednesday, for example, it gaped down at the open and started at $0.42, around 8% below its previous close. After some intense trading, it managed to regain some of the lost ground but still finished the session in the red. More than 1.5 million shares changed hands meaning that the trade value stands at around $568 thousand which is quite a lot but, perhaps more surprisingly, there doesn’t seem to be a reasonable explanation for the sudden volume spike.
The latest 10-Q was published a couple of weeks ago, there are no new press releases and even after the erratic price movement, the message boards look deserted. TBIO‘s behavior is hard to explain for one more reason – unlike other penny stocks that rely on nothing more than bright promises and wishful business plans, we have a real operating entity on our hands this time. That said, a potential investment is not risk-free.
TBIO‘s stock was actually listed on NASDAQ a few years ago, but it failed to remain above the $1 per share mark which means that the ticker had to be transferred over to the OTC Markets back in 2007. The reason for the low share price is, as you can imagine, the constant losses which are, by the way, perfectly illustrated in the latest 10-Q. Here’s a rundown of the most important figures as of September 30:
- cash: $4 million
- current assets: $14 million
- current liabilities: $9 million
- quarterly revenues: $6.6 million
- quarterly net loss: $5.5 million
The financials look bad enough on their own, but when you compare them with the figures from the previous periods, you’ll see that TBIO‘s positions are weakening by the minute. Put the latest 10-Q next to the one covering the second quarter of 2013 and you’ll see that they have burned through quite a lot of cash, the current assets have decreased while the debt has mounted. Revenues have also taken a blow and the all-important bottom line is even worse. A year-over-year comparison yields pretty much the same results which means that the management team will have to think long and hard about coming up with cost-cutting measures if they are to turn a profit..
Still, investors seem to be spotting a light at the end of the tunnel and it comes in the shape of the new CEO, Paul Kinnon. Mr. Kinnon was appointed at the end of September and this had an immense effect on the share price. Since then, some more new people have joined him at the helm and it’s clear that the shareholders’ hopes lie with the new officers and their ability to turn things around.
Success is till not guaranteed, however, which is why considering all the risks carefully is absolutely crucial.
Jones Soda Co. (OTCMKTS:JSDA) is another solid venture on the OTC Markets and they also had a rather eventful pre-Thanksgiving session. The ticker dropped by around 5% while shifting more than $505 thousand worth of shares. Medical Marijuana, Inc. (OTCMKTS:MJNA), on the other hand, finally managed to break the prolonged fall and jumped by no less than 25%.
