Now this is what I love about teasers: We have a newsletter editor, in this case Stephen Oakes from Volume Spike Alert, confidently assuring us that he has already chosen the best stock for the coming year … and it’s a tiny little penny stock. Delicious!
And just to tease you a little bit, too, I saw this email on Wednesday and, almost certainly in reaction to the marketing wave, the stock price jumped 10%. It hasn’t dipped back down yet signficantly, but it certainly might.
So what is it?
The teaser is all about a little company in Texas and the Ukraine that has apparently mastered “scarless surgery” technology.
The fun part of the teaser is the Hollywood twist — he spends a fair amount of time assuring us that Hollywood A-listers will be first in line to use this technology following plastic surgery, so they can keep lying about their “perfect” bodies with impunity — no scars to tell the tale!
In saying that “The World’s Biggest Celebs Hand You A Shot At ‘Plastic Profits'” he throws down a bunch of names: Tom Cruise, Bruce Willis, Demi Moore, Sylvester Stallone, etc. etc. None of them has used this technology, of course, since it’s not yet approved in the U.S., so don’t get too excited.
“After countless hours of research, I’m thoroughly satisfied that this company’s technology is safe, effective and as revolutionary a medical innovation as we’ll see in the next few years.
“Surgeons at 27 Ukraine hospitals are already using this technology in clinical trials with phenomenal results!
“Things are going so well with the trials in the Ukraine that this company expects sales of the device to reach $7-10 million in 2008 and increase up to 50% per year after that. “
He also talks about the fact that it’s not a negative that this technology came from the Ukraine, and how shameful it is that stem cell research and new developments are being ignored by US medical research establishment (this particular one isn’t a stem cell treatment, though there are stem cell ideas for scar reduction, too). He says that part of what convinced him to accept the Ukrainian connection is the wave of “medical tourism” that’s sending Americans overseas for less expensive surgeries.
And as is required of all medical device teasers, there’s also a prominent mention of Intuitive Surgical and its move from $8 to $300+.
And there’s more to get us all hot and bothered, too, of course, all kinds of very high numbers and potential catalysts:
“Technology that is currently awaiting an FDA approval that’s expected to be handed down any day now… Technology that could hand this company a virtual monopoly over a potential $60-billion market … Technology that I’m 100% confident could push this 93-cent stock to $5 by April and to $10 (or higher) by year’s end without ever breaking a sweat…”
Volume Spike is on sale, too, of course — so you can subscribe for $995 instead of the regular $2,500 if you’re so inclined. Past teaser stocks from this company have not necessarily been massive winners, to put it kindly, you can see them here if you’re interested.
But if you’re just curious about what this stock might be … well, your friendly neighborhood Stock Gumshoe is on the case!
While this particular stock is not quite at the very bottom reaches of penny stock land (it’s not one of those prayers that trades for .00000325 cents), it is awfully low priced … and that’s after a pretty good run recently, according to Oakes, “In the past 24 months, this company’s share price has soared an incredible 3,740%!”
It has bounced between 50 cents and a dollar for much of the past year, which sounds a bit less dramatic, but it was indeed down at just a few cents back in early 2006, so some kind of several-thousand-percent gain could have theoretically been registered (sorry, I didn’t do the exact math).
So we throw all that info, and a little bit more for flavor, into the mighty Thinkolator 4000 … churning, churning, and there! Perfectly done. This stock is …
CSMG (CTUM, trades over the counter)
As I mentioned, it’s right around a dollar as of Thursday’s close — and this one may well be worth you spending a few minutes researching if you’re curious, but as always with these little penny stocks I’d urge caution and patience. So often I see these recommended or teased, and the stock soars up by 30, 50, 100% … and then a month or two later it’s right back where it started. With low volume stocks like this, even you assembled hordes of Gumshoedom could move the shares up if you got a little too excited, so be aware that might be what’s happening if you see the shares moving Friday morning.
As to the actual business, it is essentially an incubator for Ukraine-developed technologies — this particular one they call “tissue welding”, and they’ve got a few others they mention that are mostly in the energy arena dealing with natural gas. The “tissue welding” technology is indeed being used in a few Ukraine hospitals, it’s supposed to help with scarless closing of wounds, and it apparently avoids the high temperatures of similar devices that are more commonly used worldwide. I’m far from an expert on this stuff, so do your own research if you’re interested in the specifics (you’ll have to use their international website, since it’s not approved or marketed in the US) .
If you’d like to see what the company has to say about it’s plans for getting approval for their device(s) in Europe and the U.S., they have a “newsletter” that includes an update, albeit one that’s a bit old.
The good news? It’s certainly much easier to get a medical device or surgical device approved than it is to get a drug approved by the FDA. And it sounds like this device is not entirely different than more conventional tools, so maybe they’ve got a chance — I’m in no position to handicap their potential. I suppose, if they are successful, that they’ll make their money by selling the base machines and all kinds of different attachments for various kinds of surgeries.
The bad news? We’re talking about a tiny company with essentially a single core technology, addressing an area that isn’t exactly being ignored by other companies. Doing any kind of search on “scar reduction” on the web or in the medical literature will alert you to at least dozens of drugs, techniques, implants, closure devices, and wound dressings that all aim to reduce scarring. If Tom Cruise is really going to use one of them, let me know … otherwise, I’ll remain blissfully ignorant. And if I miss this ride to $5 that’s being predicted, I’ll have to settle for crying into my coffee in the morning.
And if I invest in the Ukraine, it’ll probably be in wheat.
Have a great weekend, everyone — let us know if you look into this scar-reducing magic and decide it’s going to change the world (or your smile lines).
full disclosure: I do own shares of Intuitive Surgical, but not of any other stocks mentioned here. As is my regular rule, I will not trade in any share mentioned for at least a week after writing about it in this space.
Personal Capital is an advertiser with Stock Gumshoe, but Travis also uses it every day for his personal accounts and finds it invaluable. Here's what he said: "They offer a great (and genuinely FREE) 'second opinion' for your financial plan, but what I love most is their automated financial dashboard -- it will look at all your assets and debts, tally up your asset allocation, project where you'll be at retirement, and suggest ways to manage risk or improve returns. It's free, I think their free tools are great, and I think it's worth checking out -- you can do so here.