Having soared to heights that made shares of Implant Sciences (IMSC.PK) a triple in quick time, the stock experienced a pullback on Friday as the day, momentum and swing traders likely pulled some profits from the table and went looking for the next quick runner. The retracement continued on Monday with shares dropping another eight percent to close the day at $1.32, still up significantly from just a few weeks ago.
Although some investors may remain skeptical when a stock retraces so suddenly, such moves should be expected in the markets as rarely does a quick runner just keep going up and up without experiencing periods of pullbacks and consolidation. It's only healthy and allows traders of all flavors - long, short, swing and momentum - to all make money.
In terms of Implant Sciences, one thing that has not changed during the adrenaline rush of a quick rise a sudden retreat over the past couple of weeks is the potential of the company's technology to become a global leader in explosive trace detection (ETD). Pending catalysts are also still on the table and evidence is there that Implant's technology is far superior to any potential competition that may be on the market - most notably because it does not use any radioactive particles to detect explosives, unlike the competition, and because of a quick "clear down" has the ability to conduct "assembly line" inspections - which should enable the company to come out on top when it comes to searching for and landing significant government contracts in anticipation of the stringent security guidelines being implemented by security agencies in the U.S. and world wide.
Most significantly, should the TSA approve Implant's Quantum Sniffer (QS) ETD technology by late August, as expected, the company stands to land heavy contract offerings as the result of December's TSA mandate that will require ALL inbound air cargo on passenger airliners to be screened for explosives. An approval by the TSA would also open up the markets of many "mirror agencies" in countries around the globe who look toward the U.S. for approval guidance of their own.
In the meantime, the diversity of the Quantum Sniffer technology is still on display.
Earlier this year, Implant's Sniffers were selected by the National Security Forces of Colombia to take part of a layered security plan to protect the Sixth Summit of the Americas, a huge event that hosted numerous leaders of the Americas, including Barak Obama - and his entourage that made the event so famous for their dalliances into the Cartagena night life.
In addition to providing protection for national-level agencies, the company has also made inroads into the private sector.
As announced on Monday, the Quantum Sniffer QS-H150 handheld explosives trace detector was selected by a bank in Singapore to sure up its security. As noted in the press release, the bank chose the QS-H150 due to the lack of a radioactive threat with use, the same advantage that could propel the QS technology to the top of government wish-lists later this year.
Also noted in Monday's release, "This sale continues Implant Sciences success with corporate customers that include banks, stock exchanges, hotels, manufacturing plants, and office buildings around the world. Recent financial service shipments include banks in Europe, the Middle East, Africa, and Asia."
With the rapid rise of this company's awareness and potential for an imminent TSA approval to hit the wires, Implant has been securing a top-notch management and advisory team with heavily-established ties to the TSA and other national agencies.
Another event that could start taking shape is a potential move to one of the larger trading exchanges, where the company's stock may achieve another credibility boost from investors who don't necessarily dabble in OTC and Pink Sheet stocks. To speculate even further, CEO Glenn Bolduc noted in a recent interview with Government Security News that a name change could eventually be in effect to match the company's now primary selling point - providing security through explosive and narcotics trace detection. Should the company follow through with such a move, the opportune time to do it would be in conjunction with a move to a large trading exchange.
Just something to keep in mind.
In the meantime, the recent dip might have opened up yet another buying opportunity for potential investors of IMSC, and a time to accumulate more for those longs who are eyeballing the August catalyst.
It's very worth watching this company and not letting it slip too far from the radar right now as events play out. The sector is booming and homeland security money looks to be flowing again from national and private coffers as the economy shores up.
In discussing the effectiveness and diversity of his company's technology, CEO Bolduc added,
As our company grows it is important that we continue to diversify our revenue base between government and commercial customers. This serves to increase the total available market for our technology and reduces the reliance on any one sector. Both government and commercial entities have security requirements that include explosives trace detection, and today's announcement proves that we continue to win contracts in both markets.
Implant Sciences may still be only in the early stages of growth.
Disclosure: Long IMSC.