In honor of Valentines and Presidents I have prepared for you today a special treat. It also lines up nicely with usual feeble market action in the last-half of February, the infamous weak link in the Best Six Months November-April.
In between several presentations I made at
The MoneyShow Orlando last week I also had the privilege of moderating a very interesting Nano/Micro Cap panel with two small public companies. I found one so particularly intriguing that I picked up a few shares myself on pure speculation. Upon further review, I thought I would share it with all of you.
Pressure Biosciences, Inc (PBIO) is not in the usual class of stock we present to you that come through our rigorous screens. All those stocks must by definition have both reported revenue and positive earnings (unless it’s a short trade). PBIO has revenue albeit small so far, but not positive earnings. The reason being it is much more early stage than we would normally bring to your attention.
There are three main reasons I found this stock attractive.
1. The technology and product look quite promising and is in one of our favorite long term sectors, biotech.
2. The stock price is way down, trading at a 52-week low and looks undervalued and unnecessarily low. So we are not chasing some runaway, hyped-up penny stock.
3. The CEO and founder, Richard Schumacher has a solid history in the industry of bringing startups and early stage companies to fruition.
The company’s patented pressure cycling technology (PCT) uses highly controlled hydrostatic pressure to crack open all types of cells with the minimum amount of pressure to “open” the cell up gently to preserve as much cellular material as possible for more effective results in research, testing and development in the biotechnology, pharmaceutical and other industries.
The PCT platform uses alternating cycles of hydrostatic pressure between ambient and ultra-high levels to safely and reproducibly control bio-molecular interactions. PBIO has installed over 250 PCT systems in approximately 160 sites worldwide. Over 100 publications cite the advantages of the PCT platform over competitive methods. Primary markets are in the biomarker discovery, drug discovery and design, and forensics areas. The technology also has been applied to bio-therapeutics characterization, soil & plant biology, vaccine development, and counter-bioterror.
Two weeks ago the company announced “CE” approval, which enables them to market and sell the product in Europe. They have just entered their second year with co-marketing partner SCIEX, a global leader in mass spectrometry and a trusted partner to scientists and lab analysts worldwide, which is a division of Danaher (DHR:NYSE).
There newest and improved PCT product, the Barocycler® 2320EXT (EXT for extreme) is computer controlled and allows the user more capabilities than previous models and has so far been well received by scientists and researchers. The plan is to hire or bring in a real sales force in Q1 2017 to ramp up sales of the new Barocycler.
The major hurdle and issue here is the potential dilution from a proposed share offering. This is what apparently knocked the stock down last fall into early 2017 from the mid-40-cent range to the current 15-16 cent range. The good news is it seems to have found support at 15 cents. The offering is intended to raise funds for expansion and to aid in getting the stock onto regular NASDAQ. In order to do that they stock needs to be trading at $4 or higher as required for a company traded publicly for three years and needs shareholder equity of $5 million.
The offering would give them the $5 mil in shareholder equity, but they will likely need to reverse split the stock to get the price up to the required level. The question is at what price they will be able to do the offering and reverse split. This is definitely a high-risk speculation, but the potential reward seems worth a shot for a small portion of your speculative capital.
BUYERS BEWARE the market makers seem to be working the stock rather heavily. So
USE LIMIT ORDERS, NOT MARKET ORDERS. Have patience, do not chase this stock. It’s been bouncing along the 52 week low for the past 3 weeks.
Use a Buy Limit of 16 cents. And by all means SELL HALF ON A DOUBLE. I urge you do your own due diligence and please read
PBIO’s S1 filing on the offering.
Disclosure Note: At press time, officers of the Hirsch Organization, or accounts they control held positions in PBIO.