1. Miracle 2. Ramping 3. Hope 4. Sales of 400,000 litres of Antimicrobial. See 3 and 1.
Interestingly we haven't heard a peep from the company about sales. You'd have thought that the poultry producers would be biting their hands off for it, now that the plant is up and running to 50% capacity.
My guess is they will be able to sell it.. but at what price? Notice the 2 year old South African deal gave price but not quantity. We also had outgoing staff last year saying that the company was overly optimistic to the market about how much to expect for the product.
A bit hard to apply much fundamental analysis to a stock where you have no idea how much revenue the company will generate, if any. Then you have to factor it the 50% dilution that will occur because of the Mizuho deal on the shares and expired options, making the market cap $240million rather than $120m.
No doubt fund managers do use TA. But they primarily use index weightings and fundamentals.
Remember, Mizuho didn't just invest $60million into the company to buy shares. They did a deal that gurantees them 8.5% interest on the money should they not want the shares at the end of it all. This is unusual since companies raise money by either: share issue - which results in no loan to service and shareholder dilution or, debt facility - which results in no dilution, but a loan to service.
In this case CMQ ended up with the worst of both worlds - dilution and a debt to service!
So we have a Japanse company with in-depth research and consultants working at CMQ, who are unwilling to take much risk.
With this in mind, with no news about contracts, no profit scenario calculatable, no certainty about when the factory can run at 100% of capacity, news that potential profits were overstated, and constantly delayed profit scenarios ... what fund manager would buy more?
I tried trough various large brokers to short this stock a while back, but there were constantly no shares available to borrow. Not a good sign either.
My view, is its ramping or insider knowledge.
Could this stock go up, of course it could - short term. Could the long term trend reverse - unlikely, that would take something big.
Joel
CMQ Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
