Anytime you wish to invest in something long term it is important that you do the due diligence to find out exactly what it is and exactly how it works. So what is cord blood? Cord blood is blood that is collected at birth from the umbilical cord that provides vital stem cells for later use in life. What then are stem cells. Quite simply, stem cells are very early cells - blank cells if you like - that can develop into almost all other types of cell and tissue.Stem cells are found throughout the body, but especially in bone marrow, in peripheral blood (your circulating blood) and in the umbilical cord.The stem cells found in cord blood are particularly versatile, collected using a straightforward technique and, because they're brand new, they're also at their most vital.
Stem cells have been shown to have amazing success in regenerating themselves into healthy cells of many types. Currently the most popular use for cord blood stem cells is the treatment of blood disorders such as leukemia and anemia. What we do not know is its future applications which at the time is being studied and evaluated in many prominent medical facilities. Due to its ability to regenerate cells stem cells are currently being studied to treat diseases such as heart disease, diabetes, Parkinson’s disease, spinal cord injury, strokes, osteoporosis, skin burns, osteoarthritis and tendon, muscle and ligament injuries.
Cord Blood America ticker symbol cbai.ob is front and center in the stem cell business. They have quietly over the last several years made key acquisitions of competitors be it for their book of business or their equipment. Those companies are CureSource, Core Cell, and Cryobanks. These acquisitions have allowed the company to further their business by opening one of the worlds largest cryogenic labs in the world. This is a start of the art lab and storage facility located in Nevada and scheduled to open the first week of October. With any business you want to find their competitive advantage when compared to their piers. Cord Blood, though waiting on fda approval, will now be able to generate their own stem cells from the cord blood within their own lab. They will also be licensed to store other types of stem cell blood for themselves or other companies that do not have the correct storage facilities. What all of this has done is significantly reduce any and all outsourcing the company has done in the past to in house work. This should and will significantly increase gross margins for the company and create more opportunity for shareholders. Worth noting is that unlike many small companies instead of taking on debt management has aggressively paid down debt this year in the sum of 8.7 million dollars. This has strengthened their balance sheet and has positioned them to take advantage of a new and aggressive market for their services.
This is a highly speculative stock. Though the company seems to be making smart moves to position itself both competitively and financially it trades under a penny, .009 to be exact. From a technical standpoint there are 2.5 billion outstanding shares and annual revenue of 3.52 million. As you can see from the sales this is truly a micro cap story. I know that 2.5 billion shares seems like quite a bit however this isn't uncommon in an upstart company in the medical field. Due to the time that it takes to get technology to the market many of these micros spend years making no money just to get to market. The only way they stay a float is to issue more shares to fund current and future operations. When you look at these companies you can't think about what they have done but what can they do. Do they hold a competitive advantage? Do they provide a service that is currently unmet? Are they all inclusive or do they rely on others to complete their business? With CBAI i think you will find that they have positive answers to all these questions. Ultimately you have to decide if you think there is a future in stem cell research and specifically with cord blood. For me the answer is yes. My belief is that this is an untapped market and we are in the beginning stages of what could be explosive growth. If this catches on, especially with insurance companies, than this thing explodes. What are my thoughts with pricing. With a couple of positive pr catalyst this can probably go to .08 to .10 in the next 3 months. May not sound like a lot but from were we are that is 800 to a 1000%. You never get these returns in large medium or small cap stocks. This is the only way to do it. As always do your own research and as a disclaimer I am long CBAI at .0064.. Happy stock hunting!!