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What’s Next for Small Caps Amid Continued Market Turmoil?
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After getting a boost as the dust settled from the contentious midterm elections, markets turned lower late last week and continued to accelerate their decline on Monday.
The S&P 500 was down for the third straight day as a sell-off in Apple (NASDAQ: AAPL) and technology shares weighed on U.S. stocks.
In addition, General Electric (NYSE: GE) shares suffered, furthering weighing on the indices, after its chief executive Larry Culp said he feels “a sense of urgency” in selling assets to cuts the company’s debts and strengthen its balance sheet.
Despite the increased selling in larger cap shares, small-cap equities are showing some resilience. While the tech-heavy NASDAQ declined nearly 3%, the small-cap benchmark Russell 2000 declined less than 2%.
The divergence between the indices likely points to more choppy trading in the weeks ahead.
While the broader indices continue to form a broad trading range after multi-year bull moves, investors building baskets of the right small-cap stocks are still positioned for great returns.
Some of those stocks are featured in this newsletter. Be sure to read it each week for the latest developments on these names and more.
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| Small Cap Consumer Research Issues Buy Recommendation on Nutriband (OTCQB: NTRB) |
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Nutriband (OTCQB: NTRB) a pharmaceutical company developing and commercializing a portfolio of prescription pharmaceuticals, OTCs, and consumer products based around the science of transdermal/topical technologies, was recently covered by Small Cap Consumer Research. In the initial report, the Small Cap Consumer Research analyst issued a buy recommendation and $12 price target for Nutriband.
Why It Matters: The research report highlights Nutriband's emerging leadership position in the medical and consumer transdermal patch markets, driven in part by the company's acquisition of 4P Therapeutics in August 2018, as well as detailed coverage of near-term catalysts, including the patent-pending opioid abuse-deterrent patch, Defent, and the rollout of consumer patches in Asia. Additional details pertaining to the company's recently announced signing of an acquisition agreement of Carmel Biosciences are also highlighted in the report, as well as the acquisition’s expected impact on Nutriband's position in the market for alternative dosing.
The full report can be downloaded at: http://www.ntrbinfo.com/NTRB%20Initiation%2011-7-18.pdf
Disclosure
Nutriband Inc. (OTCQB: NTRB) is a client of RedChip Companies, Inc. NTRB agreed to pay RedChip Companies, Inc. a monthly cash fee and 10,000 shares of Rule 144 stock for 6 months of RedChip investor awareness services and consulting services. RedChip also agreed to pay Small Cap Consumer Research $2,500 a month for 12 months for coverage of Nutriband, Inc. (“Subject Company”), including the publication of initiation reports, quarterly review reports, and other related research reports on the Subject Company.
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| Nemaura Medical (NASDAQ: NMRD) Reported Q2 Results Last Week |
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Nemaura Medical (NASDAQ: NMRD), a medical technology company developing sugarBEAT® as a non-invasive, affordable and flexible continuous glucose monitor (CGM) for use by people with diabetes and pre-diabetics, last week reported financial results for its second quarter ended September 30, 2018.
Why It Matters: NMRD is preparing for the commercial launch of its sugarBEAT® product, which recently reported positive interim data from the clinic portion of its study. The company signed a letter of intent for sugarBEAT’s commercial launch in Qatar and plans to file an FDA submission for the U.S. Moving into the commercialization phase requires capital, and NMRD again demonstrated its ability to effectively manage its capital, with cash declining just moderately from the prior quarter.
Key Quote: “We have maintained our well capitalized financial position to better support the expected commercial launch of sugarBEAT® in the United Kingdom in the coming weeks. Moreover, we anticipate achieving profitability in a significantly shorter time frame, as compared to other CGM providers, given the research and development costs we have incurred to date have been substantially lower, a trend we are confident will continue as we commercialize sugarBEAT®.” Dr. Faz Chowdhurry, CEO
Disclosure
Nemaura Medical (NASDAQ: NMRD) is a client of RedChip Companies. NMRD agreed to pay RedChip a monthly cash fee for investor awareness services.
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| Spectrum Global (OTC: SGSI) Reports Q3 2018 Revenue Up 300% and Positive EPS of $0.04 |
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Spectrum Global Solutions (OTC: SGSI), a leading provider of telecommunications engineering and infrastructure services for enterprise customers and Tier 1 carriers across the United States, Canada, Puerto Rico, Guam, and the Caribbean, announced impressive third quarter results Tuesday, with revenue up more than 300% from the year ago period to $9.7 million and more than $400,000 net income, or $0.04 per share on a fully-diluted basis.
Why It Matters: SGSI currently trades for a market cap that is barely more than the net income it generated in the third quarter. Its revenues for the period are nearly 20 times its market cap. This should come as no surprise to investors who have been following the story, as the company has announced contract wins nearly every week, the majority worth more than $1 million each. With its track record for contract wins quite firm, it’s only a matter of time before SGSI reaches profitability on a trailing 12-month basis, at which point the stock will likely be trading for a more realistic and significantly higher valuation.
Key Quote: “We are experiencing consistent revenue growth from our AW Solutions and ADEX subsidiaries, that is much stronger than the prior year and expect to continue this growth pattern both organically and through strategic, accretive acquisitions.” – Roger Ponder, CEO
Disclosure
Spectrum Global Solutions (OTC: SGSI) is a client of RedChip Companies, Inc. SGSI agreed to pay RedChip Companies, Inc. a monthly cash fee for six (6) months of RedChip investor awareness services.
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| Immuron’s (NASDAQ: IMRN) NASH clinical trial presentation and continued revenue growth |
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- Professor Arun Sanyal to present IMM-124E NASH clinical trial results at the Liver Meeting in San Francisco
- Travelan® on display at HealthEd
- Australian Travelan® sales continue to grow, with a Q1 CY19 figure of $340K AUD. This is a 3% increase from the same period last year
- In the month of September, Australian Travelan® sales reached $142K AUD representing a 20% increase on the same month of last financial year.
- Global Immuron Limited sales for Q1 2019 reached $482K AUD, a 2% increase on the same quarter of last financial year
The Backstory: Immuron’s (NASDAQ: IMRN) IMM-124E is in three Phase 2 clinical trials for NASH, ASH, and pediatric NAFLD. In March 2018, the Company reported positive Phase 2 results in a NASH clinical study. NASH therapies are estimated to become a $40 billion global market by 2025, and significant valuations have been afforded to companies in Phase 2 trials for NASH. Intercept Pharmaceuticals had positive Phase 2 results for NASH, leading to an increase in market cap from $1.5 billion to $6.6 billion. Additionally, companies such as Galectin Therapeutics ($164.5 million), Galmed Pharmaceuticals ($248.5 million), Conatus Pharmaceuticals ($120.6 million), and Genfit SA ($740.2 million), are in Phase 2 trials for NASH and have valuations higher than Immuron.
Disclosure
Immuron Ltd. (NASDAQ: IMRN) is a client of RedChip Companies, Inc. IMRN agreed to pay RedChip Companies, Inc. a monthly cash fee for 12 months of investor awareness services.
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| GSRX Industries (OTCQB: GSRX) Talks About Growing Market in Puerto Rico and Future Plans for the Company in Exclusive Interview |
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GSRX Industries’ (OTCQB: GSRX) CEO Les Ball spoke with Stock Day’s Everett Jolly in an exclusive interview which covered GSRX’s recent record quarterly revenue, its current and expanding operations in Puerto Rico and California, and future plans.
Key Quote: “We have 4 stores open in Puerto Rico, they’ve been open anywhere from 7 or 8 months ago, to just a few weeks ago ... and we are going to have 11 in the very near future.” Les Ball, CEO
What’s Next: GSRX has now reported three successive quarters of solid growth. With more dispensaries set to open in the near-term and expanding opportunities in other areas of the cannabis space, such as the company’s innovative Dragon Glass product, a patent pending, water-soluble superfood product unlike anything on the market, GSRX is ideally positioned for success in the rapidly evolving multi-billion-dollar cannabis space.
Disclosure
GSRX Industries (OTCQB: GSRX) is a client of RedChip Companies. RedChip Companies, Inc. received 1,000,000 registered shares of GSRX for consulting services and 50,000 shares for investor awareness services. Be advised RedChip intends to sell some or all of its shares at any time, including when you are buying.
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| Cuentas (OTC: CUEN) Subsidiary Limecom Signs a $4M Factoring Agreement |
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Cuentas (OTC: CUEN), a FinTech service provider delivering mobile banking, prepaid debit, and credit and telecommunications services to underbanked and underserved communities, announced today that its wholly owned subsidiary Limecom, which specializes in wholesale international telecommunications services provided via Voice over Internet Protocol (VoIP), executed a $4 million, three-year, factoring facility with AEC YIELD CAPITAL LLC, an affiliate of Advanced Energy Capital, LLC ("AEC").
Key Quote: "Securing this facility is key to the growth and profitability of Limecom, which will help Cuentas tremendously. This financial agreement should be beneficial to the entire company and help generate additional significant revenue and profitability." Orlando Taddeo, International CEO of Limecom
What’s Next: Limecom, a wholly owned subsidiary of Cuentas, has interconnections with over 100 carriers around the world and has provided over 2 billion minutes of voice traffic. Limecom generated revenue of over $100M in fiscal 2017. In fiscal 2018, Cuentas' Income Statement will reflect 100% of the revenue of Limecom. This provides a significant foundation for Cuentas as it executes on its broad-based initiative to deliver robust FinTech solutions to the nearly 80 million underbanked and unbanked people in the U.S.
Disclosure
Cuentas (OTC: CUEN) agreed to pay RedChip Companies, Inc. 10,000 shares of Rule 144 stock and a monthly cash fee for three (3) months of investor relation awareness services.
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Landmark Infrastructure Partners LP (NASDAQ: LMRK) Reports 30% Increase in Revenue YoY Based on 3Q Results
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Rental revenue for the quarter ended September 30, 2018 increased 30% to $17.6 million compared to the third quarter of 2017.
Net income for the third quarter of 2018 was $105.1 million, compared to net income of $3.8 million in the third quarter of 2017.
For the nine months ended September 30, 2018, the Partnership reported rental revenue of $50.1 million, net income of $118.0 million, and net income attributable to common unitholders of $4.18 per diluted unit.
Key Quote: “We are very pleased with our strong third quarter results and the excellent progress we are making on recent initiatives. ... These initiatives will allow us to drive more meaningful growth to the Partnership as we leverage our relationships and our large and growing portfolio of core infrastructure assets.” Tim Brazy, Chief Executive Officer of the Partnership’s general partner
The Backstory: The Partnership owns and manages a portfolio of real property interests and infrastructure assets that the Partnership leases to companies in the wireless communication, outdoor advertising, and renewable power generation industries.
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Dollar Strengthens with U.S. Economy
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The U.S. dollar reached a 16-month high on Monday against all major currencies as investors are betting on the Federal Reserve to increase rates by the end of the year.
Also, the euro and pound continue to decline, with no-Brexit deal and a growth rift in Europe over Italy’s budget.
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| Quote of the Week |
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"We invest at a price so cheap relative to intrinsic value that even if we are wrong about what happens to the companies, we can still do well."
- Dave Maley, Manager Ariel Discovery Fund |
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| About RedChip |
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| RedChip Companies, an Inc. 5000 company, is an international investor relations, media, and research firm focused on small-cap and mid-cap companies. Since 1992, RedChip has delivered concrete, measurable results for its clients through the most comprehensive service platform in the industry for small-cap and mid-cap companies. These services include a worldwide distribution network for its stock research written by analysts holding the CFA designation; retail and institutional roadshows in major U.S. cities; outbound marketing to stock brokers, RIAs, institutions, and family offices; a digital media investor relations platform that has generated over 2.3 million unique investor views; quarterly global online institutional and retail investor conferences that reach over 10,000 investors annually; "The RedChip Money Report" television show which airs in 100 million homes across the U.S. on The Family Channel; a weekly newsletter delivered to 60,000 investors; TV commercials in local and national markets; corporate and product videos; website design; and traditional investor relation services, which include press release writing, development of investor presentations, quarterly conference call script writing, strategic consulting, capital raising, and more. |
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| RedChip Disclosure |
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RedChip Companies, Inc. research reports, company profiles and other investor relations materials, publications or presentations, including web content, are based on data obtained from sources we believe to be reliable but are not guaranteed as to accuracy and are not purported to be complete. As such, the information should not be construed as advice designed to meet the particular investment needs of any investor. Any opinions expressed in RedChip reports, company profiles, or other investor relations materials and presentations are subject to change. RedChip Companies and its affiliates may buy and sell shares of securities or options of the issuers mentioned on this website at any time.
RedChip Visibility is a division of RedChip Companies, Inc. and offers research services to paying clients. In the purview of Section 17(b) of the Securities Act of 1933 and in the interest of full disclosure, we call the reader's attention to the fact that the RedChip Companies Inc. is an investor relations firm hired by certain Companies to increase investor awareness to the small-cap equity community.
Stock market investing is inherently risky. RedChip Companies is not responsible for any gains or losses that result from the opinions expressed on this website, in its research reports, company profiles or in other investor relations materials or presentations that it publishes electronically or in print.
We strongly encourage all investors to conduct their own research before making any investment decision. For more information on stock market investing, visit the Securities and Exchange Commission ("SEC") at www.sec.gov and view RedChip’s Disclosures. |
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Copyright © 2018 RedChip Companies, Inc. All Rights Reserved.
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