United Treatment Centers Inc (OTCMKTS:UTRM) Shoots Up on Speculation

United Treatment Centers Inc (OTCMKTS:UTRM) went through the roof yesterday. Just one session was enough for the ticker to double its price while shifting almost $600 thousand worth of shares. That’s a lot of volume for a stock that has just emerged from the triple zero territory.

That said, UTRM is still relatively cheap which allows traders to jump in at the lower levels and, if the company has some real potential, they might actually see their investments grow. But will they?

Unfortunately, after quite a lot of time spent researching UTRM, we can see that yesterday’s spike is due to nothing more than rumors and speculations. The management team haven’t made any announcements since December 17, the latest report was filed on November 15, and there doesn’t seem to be any promotions for the ticker at the moment.

The message boards are buzzing with activity and some traders suggest that UTRM might be following in the footsteps of other triple-zero tickers and could be taking on the marijuana industry. The lack of official announcements, however,will probably deter the more cautious investors. While we wait to see what’ll happen next, we might as well take a look at the fundamentals and see if there’s anything at all to suggest that UTRM is on the road to success.

Things are not off to the best of starts. According to the profile on the OTC Markets’ website, the company’s principal offices can be found on the eight floor of the building located on 157 Sands Point Rd in Port Washington, New York. When you put in this address in Google Maps, however, you’ll see that it takes you to a residential house and, as you can see from this link, it doesn’t really have an eight floor.

The situation becomes worse when you check out UTRM‘s main product. Back in 2012, they completed a reverse merger and started offering a clever training platform for stock traders. It’s called Element Trading and it’s supposed to provide users with guaranteed profits. We’ve been around the stock markets for long enough to know that nothing is ever 100% guaranteed which is why we did a bit of research to see what investors think about the system. Having gone through a few reviews, we can see that opinions are generally negative.

Nevertheless, the Elite Trading platform did bring in around $48 thousand in revenues during the third quarter of 2013, but back in December, they announced that (for reasons that are not very well explained) they are spinning it off.

This means that UTRM now have to find a new business plan, but according to the latest quarterly report, they don’t have much money to do it. Here’s a summary of the figures as of September 30:

• cash: $743
• current assets: $57 thousand
• current liabilities: $734 thousand

It’s clear that the financials are far from solid enough to justify the market cap which, at yesterday’s close, hovers around $6.6 million.

Speaking of which, there might be some people who can take advantage of it. The Q3 disclosure tells us that quite a lot of stock was issued back in June 2013 as a conversion of debt. The shares were valued at $0.00024 a pop and if the former creditors still hold them, they could decide to cash in.

If they do it, UTMR is probably in for a scary drop. Which, by the way, is what happened to Imogo Mobile Technologies Corp (OTCMKTS:IMTC) – a ticker that managed to wipe out around 38% of its value in just six and a half hours of trading.

IMTC showed traders that some penny stocks are more dangerous than others. We reckon that UTRM is one of the most risky tickers out there which is why, doing a lot of due diligence and weighing the risks carefully is absolutely essential.