Hey Kuwl,
Any news on AVMD? Thought i was smart buying on the dip... then the dip got bigger n bigger lol.
AVMD, AVMD, AVMD ... OMG I'm so pissed about this one. I was fully loaded at .16 and some friggin' idiot scared everyone off with some week-old article.
Here's the exact post:
"AVMD-Big Trouble Link + Video
This is why we are going down. Watch the video too....
http://www.smh.com.au/national/impotence-firms-cures-must-be-scrutinised-mps-20091124-jhem.html "
OK, first, this was over a week ago, and I already knew about it. It didnt matter then, and it shouldnt matter now ... but, you had the lemming effect today (one following the other) and the MMs capitalized on the panic selling. I wasnt fortunate to add more today as I am having problems with my broker and my margin account. However, shareholder equity in AVMD is .40, so if you were fortunate enough to buy today at .10, then you got a 75% discount just to the equity, not to mention the earnings potential here.
Here's a blog that's much reasonable in its approach to reveal the true value of AVMD:
"Predictable Penny Trading Patterns Makes Advanced Medical Institute, Inc. (AVMD.OB)
11-29-09
The market has firmly positioned itself above DOW 10000 and many of the large cap stocks have seen significant gains since the first part of 2009. However, many have recently begun to level off. It kind of makes you wonder if all the opportunities for substantial gains in the market have come and gone. Well, in my opinion there are still quite a few stocks that are cheap, profitable, but have yet to recover with the market. I believe most are hidden in the OTC Markets. Sparked by its recently released 10-Q, Advanced Medical Institute, Inc. (AVMD.OB) is the next perfect stock.
Advanced Medical Institute is a service provider, which arranges for patients with sexual dysfunction and prostate problems in Australia, New Zealand and the United Kingdom to be provided with medical services, pharmaceuticals and associated clinical support services.
Fundamentals
AVMD.OB got beaten down as did most stocks during past year and half. However, on 11-23-09, the company released their 10-Q detailing the results of their most recent quarter. See below for a few highlights (click here for the full 10-Q):
- 53.5 Mil shares outstanding
- $14.5 Mil revenues
- $0.8 Mil net income
- $0.02 EPS
- $20.1 Mil stockholder equity
- $0.38/share book value
- Company is optimistic about business and profits going forward
The market took note of how undervalued the company became and responded by appreciating the share price up to 600%.
From the chart, you can see the large spike that occurred from the release of the 10-Q. Now, an amateur would take one look at this chart and say to themselves, "Why in the world would anybody want to buy a stock that has just had a 600% percent gain particularly after the stock price has dropped the following two days?" A more experience technician would look at the same chart and believe the current setup is extremely bullish. They would see that the stock has spiked on very high volume and quickly retraced exactly 50% on relatively low volume. Also, the experienced trader would see that each of the trading days following the spike have printed higher intra-day lows. Trading in this manner signals that the selling is being exhausted and that the stock is entering into a consolidation phase. Many traders will recognize this and will begin to take positions in the stock. I don't have an accurate total for the float of AVMD.OB, but it has to be pretty thin if the share price was able to jump from $0.04/share to $0.23/share on 2.6 million shares of trading volume. Eventually, the buying pressure will become too great and share price will jump again. In stocks with tight floats the consolidation phase can be very quick.
Different Movie, Same Ending?
I've stated before that stocks often follow market psychology. As traders see success in one stock, they look for other stocks that are similar that will hopefully mirror the results. Viking Systems (VKNG.OB) is a recent market darling that moved from sub-penny to over $1.00/share in less than 3 weeks. The recipe for Viking's success:
- Significantly beaten down OTC stock
- Positive quarterly report sparked the rise
- 40-50 million shares outstanding
- Low float
- Optimistic about company's prospects going forward
Of course there are differences between AVMD.OB and VKNG.OB, but as you can see, many of the underlying themes are the same. Also, it had the same super spike to the upper 20 cent range and a 50% retrace before moving higher. InstaCare Corp (ISCR.OB) is another stock following a similar path that in my opinion is a stage ahead of AVMD.OB. Again, it has the same recipe as others. It too had the same 50% retrace, has already consolidated in the upper teens, and is in the process of breaking out to even higher levels (click here for chart of ISCR.OB). Advanced Medical Institute looks poise to do the exact same thing. "
I'm using this opportunity to buy more at a stiff discount. Unfortunately that wont be until tomorrow, so I'm hoping to still be able to grab some .10-.12s tomorrow morning ... they might be all gone by then, though. This is one of the hassles of low-float stocks that only a select few know about ... they can be painful or very rewarding.
I see better days ahead...
