HESG- What a pathetic mess. As I forecast in the last BLOG- year end numbers were atrocious. Bottom line- the company spent $7.5 million in ’05 (not all cash) to generate $60,000 in revenues. Any way you skin the cat, it’s dead under current management.
So, what to do from here. I have been alluding to a major transformation in the company. They are working on it. Without it you are looking at bankruptcy. Complete failure.
The stock will probably trade to its lowest level in the next day or two. Here’s the chart:
As you can see, the chart is following corporate performance.
Now would be a good time to mentally review their products. SHUGR and Sequestrol are out there. They have $1 million in sales guaranteed on SHUGR this year from DNP, and more in years to come.
We have reached the point of maximum pessimism. If you have a total gambler’s mentality, now would be the time to look at buying for a dead cat bounce. You will have to assume you could lose 100% of this money, but that’s the way it’s been with this stock for some time.
Comments and questions are welcome.
Sir: I don’t think the DNP is a guarantee, I think it is a goal. Can you point to an agreement that says “guarantee”?? If the management says it, I don’t believe it. They have lied and lied and lied. And now there are lawsuits by the kettle calling the pot black. I want to see the signed document with DNP. Can you get it from them, with the language of the agreement? BD.
Editor: Not worth the time simply because if there isn’t major change, the DNP agreement is not reason enough to continue to own the stock.
Are present mgmt just incompetent?, liars?, idiots? or what?? Who has the authority to bring in new mgmt and will they do it?? How long would that take? They’ve got maybe one quarter and we could see single digits. I made a decision to hold to see if there’d be a turnaround with new mgmt. Are you just hoping, or is there really a plan in the works? TIA for any enlightenment. I’m about 2c away from simply chalking up a tax deduction if you really don’t have any idea when or even if there will be a clean sweep of mgmt with a possible turnaround. john
Editor: Either wait it out or sell it. If you read the BLOG, you know I suggested for the first time in months that it could be the bottom and a buy for your highly speculative capital- defined as money you are not afraid of a 100% loss- therefore, I believe there is a pretty good chance things will change. If things don’t change, in my view it is going to zero.
Actually, the contract with DNP is not guaranteed. DNP can terminate it at any time with 90 days notice. If there is no demand, they will just terminate it. Read the contract.
Editor: I don’t know if this is factual or not. In either case, without a major change it doesn’t matter.
I do believe that things might turn around for the better,if not oh well…things don’t always go the right direction all the time, this is why I spread out my risks due to time like this.
Editor: In the microcap world you have to be willing to accept losses and losers if you are going to be successful. Like a major league hitter, batting 300 is consider excellent. However, as I have stated, I believe this stock could actually be a treacherously speculative buy.
Hello: I would like to know why there are not as many people out there posting here to say how great SHUGR is, and how they will be devastated if SHUGR somehow disappears. I for one will be devastated. I LOVE this product. It is terrific. Price is not an issue either. Who’se trying to skuttle this company and their worthwhile product…??? maybe people who own stock in companies that produce SPLENDA???? Yuck..SPLENDA is NO EQUAL (excuse the pun) to SHUGR!!!!
Editor: I use the product as well, and like it very much. We all loved it when we tried it back in September. However, the current management has simply not been able to sell it. They have done a terrible job. Let’s hope things change and you can still get the product.
You were going to try Sequesterol Will you let us know your results. Did you have a cholestrol and/or trigl. check prior? Was it a one months supply? TIA
Editor: I had a blood test the day I started taking it. I don’t have the results yet- it was last thursday- I have a 3 month supply. And, sure- if I am still covering the company I will publish before and after numbers.
Is it possible that another food industry company such as Kraft or General Mills might buy out Health Science Group knowing what a good product Shugr is? In regard to share holders of HESG, what might happen to shares of HESG in such a case?
Editor: Anything is possible, but highly unlikely in my view.
Any thoughts on the latest press release?
Editor: Not much- I am looking for a major change in this company far in excess of simply writing a letter stating they didn’t deliver last year and promising to do so this year. Where’s the Beef? Show me sales- that’s all I care about. The current management has no credibility. It needs to go.
I agree with you that the current management has no credibility. What I don’t understand is why you believe them when they tell you that a change is in the works, or that they can even pull off a change in management when we both agree they have no credibility. Yet you are anxiously waiting for this “event” that is being touted by someone you cannot trust. I don’t understand why you would even mention it on this blog. It’s all just smoke and mirrors, and always will be smoke with no substance. Besides, when you talk to them are they really going to just say “we have nothing going on and no future”? No. So they dream something up, take a few steps toward that goal, then fail, and the cycle repeats. all imo.
Editor: Then simply sell the stock and move on. Regardless of what happens, it is out of my control. It is a microcap stock. Last summer I tried the product and loved it. I listened to their sales projections. I made free samples available to everyone. They didn’t deliver the sales are promised. I am providing what I am hearing for those that might want to hang in there.
Oh, very professional response. Since I have followed this blog I have noticed that whenever you get a hard question, your answer is “Then simply sell the stock and move on”. Easy answer for a lazy analyst wannabe that can not do ANY research on his own other than swill down free Shugr samples! You have not done any original research, and you are as pathetic as the management of this loser company. I doubt you will post this but at least you have read it. Now go sell your free stock now.
Editor: When we invest in stocks that fail, we all get frustrated. If you think I am an analyst, you are wrong. This is just a newsletter that should be viewed as a source of ideas. Some will work, some won’t. There’s risk in microcaps, and this may not be the end of the market for you if you can’t handle the risk. FYI- I don’t have any free shares I can sell.
You should note the fact that at least I am still here answering questions. No one else in this arena provides this kind of service. Most others would have ignored your comment and just moved on.
HESG is finished. Or, at least Shugr by them is finished. If you don’t sell this stock now, you are a masochist who loves to lose money. http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20060515005241&newsLang=en
Editor: Thanks for ferreting out that 411. Needless to say, the company has not informed me. No big surprise here.
Now Shugr’s goose is cooked. 25% of it has suddenly become a very scarce commodity. This isn’t helping SPEX, the inventor of Tagatose, either. Grim all around. Arla, the manufacturer, has dropped Tagatose and won’t make any more of it. I posted the article but something in the system won’t let me do it. “Invalid Post”. Can’t figure why it’s invalid. It’s just news. BD
Editor: Thanks for the contribution- not sure how you could get an invalid post.
HESG is dead meat. Just received two messages, one from Vitamin Shoppe and one from Amazon. I’ve sniped them together. “Our vendor(s) recently notified us that the product(s) that you currently have on backorder are not available at this time. Unfortunately, we now must cancel your order. Please accept our apologies for any inconvenience this has caused.This refund is for the following item(s): Item: Swiss Research – Shugr Natural Sweetener, 1 lb powder Reason for refund: Item out of stock” My hypothesis is that HESG can’t get Swiss Research to make any more Shugr because HESG never paid SR as promised. I think SR was the producer (blender) for HESG. Microcaps are very dangerous. BD
Editor: I don’t agree- yet- HESG actually sued SR over misleading statements about the formula. The product is still available. I’m not sure why it is back ordered. HESG could be dead, but it still has a chance of turning around. It will require new management. Lots of people gave up NWWV for dead last Fall when it went from $1.50 to $.19- now trading at $.55 on at least 1 million shares everyday on a 250% growth rate and profitability. Their Q3 numbers in ’05 were atrocious. Q1 ’06 numbers were great. I believe HESG could be dead, but I am not quite prepared to schedule the funeral service yet.
I don’t know what it is, except to say that it is a feeling that HESG will turn itself around. I don’t think it will happen soon but I do believe it will happen within the next couple of years. I am going to hang onto my shares and hope for the best. Other stocks have hit rock bottom, I have held on because I had a feeling about them and they have all made money for me. I hope I am right about this one. I wish that there was more information available about what is happening with the company regarding management, marketing, etc
Editor: There isn’t a lot to talk about right now, but I am keeping my fingers crossed that it changes.
“Editor: I don’t agree- yet- HESG actually sued SR over misleading statements about the formula. The product is still available. I’m not sure why it is back ordered. HESG could be dead, but it still has a chance of turning around. It will require new management.I believe HESG could be dead, but I am not quite prepared to schedule the funeral service yet.” Well, sir, just where do you get Shugr in the 1.3 pound jar? I have not been able to get a confirmed sale, just “out of stock”. Lazarra doesn’t have it, Vitamin Shoppe doesn’t have it (and thus Amazon doesn’t have it), DNP quit distributing it (I believe). Where do you get it? As for who is suing whom for what, consider this from a news item: http://tinyurl.com/oeecu Then, the HESG filing that says ” Since closing the acquisition of Swiss Research, maker of our Shugr zero-calorie sweetener, we have been working to expand distribution and sales of Shugr.” The former owner of SR disputes that the acquisition has been closed. He has not been paid. HESG does not have the requisite signed documents, or could not produce them for the judge. I believe Tannous and Co. are bald faced liars, period. They are pond scum and that is being kind. BD
Editor: Here is the response directly from the management on the availability of SHUGR: “As the demand for the Shugr 1.3 lb jar has increased the orders from Vitamin Shoppe and Drugstore.com have spiked up faster than we have been able to get out the new Shugr sku, which is a resealable baker’s bag. As such, they have exhausted our inventory. We are still supplying them and they are still selling the packets. We expect to release the baker’s bag in July. Let me know if you have any additional questions.”
It is my information the legal challenge to HESG from Swiss Research has been thrown out of court. As I understand it, HESG actually sued Swiss Research concerning fraudulent claims about the amount of Sucralose in the formula. As I also understand it, the issue has now been resolved.
Sir: Well NWWV gave at least one quarter’s alert that things had changed before the stock started to move as much as it has. So far, we see NO sign that HESG will have a good quarter for Q2 of this year. In fact, we see signs that it will be a financial disaster—sales are in a slump and product is not available. Why did you not publish my earlier comment showing that the problem is HESG has not performed on the original buy out, does not have signed documents it can bring to court and very likely is going to go bust because Swiss Research ‘ain’t makin’ any more of the stuff’? I think that was relevant, not bashing or hyping, information that is needed by those still holding that stock. BD
Editor: I haven’t commented because I am trying to get the facts before I reply. There is no sign the company will turn around, but if the pieces fall into place it could be a buy. Personally, I wouldn’t touch it just now.