TPS Position Update – May 24, 2016
. . . . 22ND CENTURY GROUP (XXII) – HOLD
We recommended 22nd Century in June 2015 at $0.74. It reached $1.65 in November for a 123% gain.
But since then, the stock has been sliding. And because of the company’s improved financial performance, we believe XXII is undervalued and ready for another runup.
Net revenues are growing. For Q1 2016, they were up $2.4 million. Revenues rose from $616,000 for the corresponding quarter in 2015 to $3.02 million in 2016. But the company is still losing money, although losses are narrowing.
22nd Century Group is moving in the right direction. It cut operating losses from $4.127 million to $3.228 million.
22nd Century is a plant biotech firm. It has found a way to decrease the level of nicotine in tobacco plants and the level of cannabinoids in cannabis plants.
Where do we go from here, and when can we expect the stock price to get moving again? We’ll need to see the U.S. sales of lower risk cigarettes increase. We’ll also need to see the markets opened in Europe to deliver stronger operating results, and the company’s efforts to profit from the burgeoning pot industry prove profitable.
. . . . FLEXIBLE SOLUTIONS INT. (FSI) – HOLD
There’s solid progress on the financial front… something of a rarity for a firm in the energy business.
When Flexible Solutions reported Q1 2016 earnings, we saw sales come in at $5.3 million, up 7% from Q1 2015. This compared to sales of $4,963,887 in the corresponding period a year ago.
Net income was $741,794, up from $504,265.
The company also bought back 1,175,000 shares in January 2016.
Flexible Solutions is headquartered in Victoria, BC Canada. The firm develops and manufactures biodegradable polymers and detergent ingredients for oil extraction. It also develops biodegradable water and energy conservation technologies.
The firm’s NanoChem division is driving revenue growth. This division focuses on detergent, water treatment, oil field extraction, and agricultural applications.
There has also been an uptick in the WaterSavr division because of regional drought conditions.
We recommended FSI at $1.20 in February 2015.
This year, on February 16th, it hit a low of $0.73. Then it went on a run and more than doubled, hitting $1.48 on May 2nd.
We expect the stock to slowly rebuild and trade above support levels in the $1.20-$1.25 range. We also expect more revenue and income growth in the quarters ahead.
. . . . UNILIFE CORP (UNIS) – SELL
Last week we told you about problems at Unilife Corporation.
On May 8, the Company delayed filing its Form 10-Q with the SEC. It also postponed its FYl 2016 Q3 earnings conference call.
Now, Unilife has received a Delisting Notice from NASDAQ.
We are advising an immediate sell. The future is simply too uncertain.
We recommended the stock in November 2015 at $0.92. Today, it closed at $2.36 following a 1 for 10 reverse split.
Action To Take
- HOLD 22ND CENTURY GROUP (XXII)
- HOLD FLEXIBLE SOLUTIONS INT. (FSI)
- SELL UNILIFE CORP. (UNIS)
Category: TPS Update
