I am always amazed and intrigued why investors don't research stocks before they purchase them. As a fund manager, the first thing I teach is the research behind the investment, then the numbers - and ChromaDex Corp., (NASDAQ:CDXC) is no different.
One of the first reasons why the Penny Stock world is so lucrative is exactly why ChromaDex Corp didn't take off today above $1.14 - because investors didn't research and don't realize that the data to be released Thursday is the first successful human clinical trial of an antioxidant derived compound found in everyday fruits. As a fund manager I strictly avoid famous old and new Pump & Dumps, when clearly after a little research anyone can conclude the company is fraudulent, their address is someone's apartment, located in a warehouse unmentionable, or worse; but, ChromaDex is certainly the furthest thing from a Pump and Dump.
ChromaDex presents their results along with the University of Mississippi school of Pharmacy on Thursday, September 20 between 1:45PM and 3:30PM at the American Heart Association conference, which they were invited to attend. If investors would do a little research they will see this stock is poised to take off, because the trial study news is already available.
I then searched the actual clinical trial to verify the data they are going to present, which is found here. While I believe the upside is warranted on this stock, the potential "hype" could be lost if investors fail to continue researching this company before making their investment decisions. As the same goes in the penny stock world, when reality sets in, stocks like these either collapse, or go for another 100% run-up.
Azbell Capital Group, LLC, my fund, initiated a BUY rating of ChromaDex Corp on September 18, 2012, when this article was first submitted. September 19, 2012, Aegis Capital has now also initiated ChromaDex as a buy. As with any small cap stock, potential downside is possible in the event that this breakthrough study is not fully realized and we must wait for actual sales of Pterostilbene to hit the market; however, we are long because we also understand that several key investors will be attending and that news to promote and sell their product will soon be released.
ChromaDex completed the first clinical human trial, ever - and if you research, we already know it was successful, and on September 20, 2012 ChromaDex will finally make public this amazing clinical trial data which we believe will fuel a 50% to 100% gain on the stock. Their polyphenol based "drug," Pterostilbene was successfully tested using a randomized, double-blind, placebo controlled study among 80 patients whose total cholesterol was between >200 mg/dL and/or LDL >100 mg/dL. Patients who were tested were 18 years or older who were either on no cholesterol medication or who were on a stable dose of 2 months with their current medication prior to the test.
To summarize, 91% of patients completed the study. The average age was 54. Amazingly, in the first study controlled human clinical trial ever, both the systolic and the diastolic blood pressures of those who took the "drug," saw a reduction of roughly 8 mmHg. The next trial ChromaDex expects to conduct is a higher dosage, more potent form of Pterostilbene to see if the blood pressure drop is greater.
The best news about Pterostilbene is that it is derived from natural products from blueberries and grapes. While studies have found that animals fed blueberry diets were found to have a significant reduction in lipid count and cholesterol count, this trial finally proves what science has believed for some time.
ChromaDex Corp., is an innovative natural products company that provides proprietary, science-based solutions and ingredients. The average new dietary supplement makes it to market within days of its manufacturing and no FDA approval is required. The test results that will be released September 20, 2012 should speak for itself and do the selling for it and according to the Center for Disease Control, half of Americans use dietary supplements, including multivitamins, minerals, and herbs.
I see the market potential of this product, either as a prescription drug, but more so as a vitamin supplement, an estimated 27B US market (Consumer Reports) and since ChromaDex already produces the vitamin, an easy breakout is foreseeable. It will definitely be interesting to see how this 0.70 stock which has jumped to 1.14 in just two weeks can continue its pace once investors who should have known the news is going to be good, add to their positions.
Disclosure: I am long CDXC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: The information contained in this article was derived from the American Heart Association and clinicaltrials.gov. Azbell Capital Group opened our position at 1.01/share and added another significant position today at 1.10/share.