It is true that Jeff Bruss is paid by companies to promote their stock. But his disclaimer at the bottom of his site is explicit in saying he may have financial relations with the companies he recommends. So why should anyone be suprised? The stocks promoted by most big brokerage firms and their analysts tend to be those of companies they underwrote and whose stock they still hold. This sort of thing is rife in the financial industry. It does mean that Jeff Bruss is perhaps not the most ethical of people. But I don't think it reflects much about the companies who use him. What's the difference between being promoted by Bruss as opposed to an underwriter like Merrill Lynch with their army of retail brokers?
It is also true that NHMCF has sizable debts on its balance sheets, mostly in the form of lease obligations for capital equipment that are coming due the next few years. This does make the stock more risky.
On the other hand, NHMCF also has $4 million Cdn in losses it can carry forward to offset taxes--no small asset relative to the size of the debt. NHMCF is also not about to go bankrupt because they seem to have no lack of investors willing to buy warrants and such in private placements. The last warrant issue allows warrant investors to buy equity in NHMCF at $7 Cdn or a bit over $5 US. The warrant buyers had to pay more to get that option. Presumably, after performing due diligence, these investors, who tend to be relatively sophisticated, judged that NHMCF stock would likely be worth more than $5 US and that the option they were paying for was valuable.
The fact that NHMCF is putting money into acquisitions suggests they are not too concerned about meeting their debt obligation. I am told by their investor relations office that NHMCF will be in the red this year, but should be in the black next year. Also expect another private placement, albeit at a higher price than the last.
As to the the quality of management, their new spoke and hub distribution system is being run by a seasoned manager from a major firm in the industry. I am further told that they have made their first sales to their leading competitor, Baxter, who usually purchases from small handwork shops and markets the kits to hospitals.
Although it trades in Vancouver, as well as NASDAQ, contrary to the Fool analyst as well as Vancouver's reputation, it doesn't look like crooks manipulating the market. If NHMCF were a market manipulation, who are they getting to do these private placements, why are they doing these acquisitions and hiring reputable managers, how did they get financial backing from the government? Buying stocks from Vancouver is risky, but precisely because most people won't do it there is opportunity to find real bargains. In short, though the negative points people made about NHMCF are real, it still strikes me as a highly promising, albeit risky investment.
Someone please respond so I don't feel like I'm talking to myself.
Bernie Elbaum |
