Vasomedical, Inc. (OTCMKTS:VASO) Rejuvenated
Up until yesterday, Vasomedical, Inc. (OTCMKTS:VASO)’s shareholders were a bit anxious. Their stock was moving sideways between $0.15 and $0.17 and it was showing no signs of making a more significant jump. The daily volumes rarely exceeded a few thousand dollars and in some cases, they were even coming in at less than $1 thousand which made the ticker rather unappealing for new investors. Now though, after yesterday’s session, we can safely say that VASO is in a much better shape. At least for the time being.
In a matter of six and a half hours, investors traded more than 840 thousand shares which pegged the dollar volume at almost $160 thousand at the end of the day. After a 26% jump, VASO stopped at its first close of over $0.20 per share in eight and a half months. The remarkable spike is most likely due to the 10-Q for the second quarter of 2015, but before we tell you what’s so exciting about it, we’ll take a walk down Memory Lane and see how VASO as we know it today came to be.
The company started off many years ago with the idea of commercializing a piece of technology called EECP (Enhanced External Counterpulsation). Sadly, things weren’t working out and the stock was struggling. In 2006, VASO was delisted from NASDAQ because it wasn’t keeping up with the minimum bid price requirement. Trading continued on the OTC Markets, but at one point, the management team realized that if the whole business revolves around the EECP technology, the company isn’t going to survive for long.
In 2010, VASO became a sales representative of General Electric Company (NYSE:GE)’s medical division and it has since then completed several acquisitions, the latest of which closed two and a half months ago when VASO acquired the Florida-based NetWolves LLC. Dr. Jun Ma, the company CEO, said that this deal will provide Vasomedical with “the platform for huge potential growth in the rapidly expanding telemedicine and connected healthcare markets”. Words like “huge” and “potential” might set off some warning lights in the minds of the more experienced penny stock investors, but as it turns out, Dr. Ma might have been onto something in this particular case.
Here’s what the aforementioned Q2 report looks like:
- cash: $2.9 million
- current assets: $14.5 million
- current liabilities: $24.8 million
- quarterly revenues: $10.8 million
- quarterly net income: $215 thousand
The revenues have grown by 37% and 45% on a year-over-year and sequential basis, respectively and the quarter ended with a positive bottom line which, while not new, is a rare thing for VASO. The best thing about the statement is, however, that because NetWolves’ acquisition was completed at the end of May, the figures above contain only a month’s worth of operations from VASO‘s newest subsidiary. In other words, the future statements should be even more exciting.
Even so, jumping in head first is not advisable. After all, you mustn’t forget that although it was once traded on NASDAQ, VASO is currently a penny stock, and as such it is riddled with risks. The appalling lack of liquidity that it displayed over the last few years is just one of them.
