Elite Pharmaceuticals Inc (ELTP)

[Hike]

Nice article on ELTP:


https://www.pennypro.com/elite-pharmaceutical-eltp-monster-spikes-draw-speculators/

Elite Pharmaceutical (ELTP): Monster Spikes Draw Speculators
by Steve LeBlancMonday, August 11, 2014
Looking for a stock with a history of making a three-bagger within 30 days, or a five-bagger in 60 days? Well, look no further, because Elite Pharmaceutical (ELTP) is in the business of swinging for the fence and occasionally connecting for trip around the bases.

In fact, a well-written article about Elite’s potentially explosive business model can be found on Seekingalpha.com, titled, “Elite Pharmaceuticals: Swinging For The Fences”. We agree with the author, wholeheartedly. What draws many to ELTP is the stock’s dramatic and disorderly price moves.

We will not rehash an already well-presented, intelligible and still-fresh overview of Elite Pharmaceuticals as the article, mentioned above, has done. We do, however, believe that, if you’re looking for a potential home run stock to compliment your portfolio, an argument can made for seriously considering ELTP.

Case in Point

In January, ELTP started 2014 at a price just under $0.15; but by Jan. 23, the stock spiked as high as $0.375, for a gain of more than 150%. After closing at $0.26 on the first day of trading in Feb., the stock spiked again, climbing as high as $0.97 on Mar. 5, for a gain of 273% within 30 calendar days.

ELTP

Traders close to the company apparently got a whiff that revenue to be reported on Feb. 14 would jump substantially, which it did. For the period ending Dec. 31, Elite’s revenue soared to approximately $1.7 million, up from approximately $700,000 for the prior year.

Accounting for the revenue jump came from the last year’s launch of Hydromorphone, Phentermine tablets and Methadone; the current year’s launch of Phentermine capsule and naltrexone; and revenue derived from the acquisition of 12 drugs in Aug. 2013.

In addition, Elite earned a milestone payment of $600,000 from Epic Pharmaceuticals – a condition of a signed manufacturing and licensing agreement with Epic.

And consider carefully the real coup de grace to account for ELTP’s monster ride. The news came a week earlier, on Feb. 7, when Elite CEO Nasrat Hakim opted to receive voting shares for his notes in lieu of $10 million of cash. That news did wonders for the stock, doubling the price in eight trading days.

The thinking goes like this: If Hakim believes that he should let his $10 million stake ride to the end, why would investors feel compelled to bail on the stock?

Could Elite announce a dilution to cover Hakim’s compensation? Of course. It happens many, many more times than not. But that’s not what happened. Hakim took the shares, and investors cheered.

With so many micro-caps historically enriching executives at the expense of common shareholders, we find it quite unusual that anyone would be so brazen as to let $10 million ride on the outcome of a small, striving pharmaceutical enterprise.

“Nasrat [Hakim] invested $10 million in Elite and Jerry invested $600,000. There weren’t enough available shares to give to them,” Elite chief financial officer, Carter Ward, said in a Feb. conference call. “So instead they agreed to accept the convertible note payable in stock or cash. Since we need the cash, we all have the stock, they canceled their note and received Series I share, which allows them to vote like a common shareholder and ensures that Elite doesn’t have to pay them cash.”

Why the $10 million Bet Could Be a Smart Move

Elite has so many irons in the fire in way of patent and off-patent drugs – of which any (or a few) may result in a positive surprise to revenue – that stockholders who dream of that wake-up-in-the-morning ‘jackpot’ multi-bagger move higher in price could actually get their wish.

Note: Elite is merely one of many ‘jackpot’ potential micro-caps we’ll be covering for subscribers of our PennyPRO newsletter.

But, it’s gets better, still, for shareholder of ELTP.

While traders position for the potential monster pop, the company works overtime establishing steady revenue growth to support the company’s impressive abuse-deterrent product line, which Elite’s chief financial officer, Carter Ward, said is “really spectacular”.

“Spectacular”. That’s exactly what investors of ELTP want to hear. And Hakim’s varied education, experience and personal stake in the outcome of Elite are enough evidence of a stock poised for some more exciting moves to come.