Umax Group Corp (OTCBB:UMAX) Crashes to the Ground

Since April this year the stock of Umax Group Corp. (OTCBB:UMAX) has been steadily climbing up the stockchart starting from $1.50 and almost doubling it last week when they peaked at $2.98. Unfortunately reality finally caught up to the company and in just 4 days they plummeted down to just $0.8 losing more than 70% of their value. Yesterday volume reached its all time high of 300 thousand traded shares.

The company is still in the development stage and its business plan consists of new and innovative nutritional products. Presently they have three products which finally helped UMAX generate some revenues. For the period ending July 31 they disclosed the following financial results:

• $8526 cash
• $10 thousand total assets
• $28 thousand total liabilities
• $7400 revenues
• $19 thousand net loss

It is apparent that for now UMAX has nothing to offer. Even at the current price levels they are grossly overvalued with a market cap of $78 million so further corrections are likely to happen.

An even bigger red flag are the extremely cheap shares held by insiders of the company. On April, 2011 60 million shares were sold to its director for $0.000025 each. Just six days later the same director bought another 120 million at the same price. A year later 47.6 million were sold for $0.0005 per share. Even though 130 million of them were returned to UMAX there were still 97.6 million outstanding shares that could bring some handsome gains to their owners.

It is best to stay away from UMAX for the time being. This may also be the right course of action when dealing with the latest pick of Awesome Penny Stocks – Pacific Clean Water Technologies, Inc, (OTCMKTS:PCWT) who have been promptly marked with the caveat emptor sign by OTCMarkets. The stock of Indo Global Exchange(s) PteLtd (OTCMKTS:IGEX) is also going down slashing a quarter of its value during yesterday’s session. The company is currently the target of a $ 3 million pump.