Time for an update on eFoodSafety. The stock is not trading well. For all those who haven’t noticed, and I’m sure everybody has, the stock is trading at a new all time low.
What’s the problem? In my view, the market is making the assumption that the Direct Response campaign they launched around March 1st is not delivering exhilarating results. In fact, the company has not provided any disclosure that would give investors information suggesting the DR campaign is generating any kind of major result. Their last disclosure used the word “Moderate”. Here’s the quote: ” The results to date of the direct-response campaigns have shown an initial moderate increase in product sales.”
The press release went on to state the DR campaign had generated traffic to the ecommerce web sites for Cinnechol and Cinnergen far in excess of expectations. The problem- conversions to customers- implication- interest positive, but not closing the deal. Modifications being made.
I visited the ecommerce web site today- www.cinnergendirect.com- The video ran fine in my browser, and the content looked relatively compelling to me. I believe it was slightly different than the original version, and perhaps is now generating better conversions.
It was never my expectation sales would go through the roof as soon as a few commercials ran. In fact, in my interview with Tim O’Leary, CEO of Respond2, he suggested these kinds of campaigns are often successful after a period of trial and error.
Technically, there’s no way to sugar coat the truth. The stock is a mess. $.165 had served as support since October of 2004 when this stock first traded.
I had set my SSL (suggested stop loss) at $.16. Therefore, if you are still holding the stock, it has either not dropped to your personal SSL, or you are simply a long term investor, in which case you don’t care about a stop loss level.
Technically, I can’t call any sort of bottom. We are into uncharted territory. Here’s a long term chart as measured on a weekly basis since it first started trading:
You can see the blip to a new all time low. I’m not sure it’s a fundamental issue. I believe it’s more group related and seasonal. The stock is already trading as if we were in the heart of the summer doldrums. Low volume drift down.
Also, with recession looming and gas prices rocketing, discretionary consumer non durables is not the hottest group on Wall Street.
The company is in the lengthy process of developing a number of natural and non toxic health care solutions. These kinds of products have a big future, but money is tight now- even for speculators.
I’m still sticking with the theme I have stuck to throughout 2008. For the OTC Journal, they have until the end of 2008 to demonstrate they are capable of generating $8 to $10 million in annual revs. If they do it, I’ll hang in there and be excited. If they don’t, I’ll drop it and move on.
On May 1 EFSF entered it’s fiscal Q4. This means their year ends July 30- we won’t see a 10k until the end of October, and then a 10Q will be do shortly thereafter. It’s a ways out.
This thing is due for a break pretty soon. I have seen a number of smaller issues make new lows, shake everyone out, then rebound. If you’re looking for me to pound the table and say it’s a screaming buy, you will be disappointed. I can’t say that. It might be, but there is no technical data to suggest it.
I don’t know where the bottom is, but we’re due for a positive development. Perhaps a surprise on PurEffect.
If you are brave soul who’s not risk averse, get into this stock now. If you’re one of those kinds of guys who believes you have to buy when no one wants something, and the tide will turn, this could be a tailor made opportunity for you.
Technically, I cannot call this one a trade, so I would recommend traders stay away. I don’t believe there’s a lot of downside risk from here, but it’s impossible to call this the bottom. It might be. Time will tell.
As always, comments and questions are welcome.