Glenn Alperin

NutraCea: Running With the Big Boys

I bought at $1.18. I bought because of the multi-tiered approach to the product mix, and because the product, SRB, was actually being produced and shipped. About a week after I bought, they had an earnings disappointment which, in large part, was due to a significant product return, without which they would have made a profit (some of us do read every line of every SEC filing). So, bad timing on my part. I was expecting it to do much better than that.

The primary problem since seems to be a lack of communication between management and shareholders concerning what management has expected for ongoing sales results. The most recent quarterly came as a surprise to me as I was expecting them, all things being equal, to come close to breaking even. That didn't happen either.

However, when they get their patent issues settled (the annual report indicated they needed a Proof-of-Concept working model), they are going to have intellectual property which, it seems to me, will be essentially a cash cow. They can then either sell SRB directly to companies for ingredients in human or animal food, or they can license the ability for other companies to produce it and make lots of money on the licensing fees. Either way, IF THEY CAN GET THEIR LOGISTICAL HOUSE IN ORDER, it seems to me there is a lot of money to be made. The real question is this: Can they pull it off? I have 500 shares that say they will, but I don't hold a crystal ball. I'm prepared to sit and wait for a long time though to find out.

Warren Buffett didn't make his money chasing stocks. He made it sitting on stocks for a LONG time. *I* think this one is going to be worth waiting for.