News Flash! From the POV of a Market Strategist
First, let me take this time to commend the traders, and want to be traders, out there. I commend you trading the intra-day movements on this stock. I just hope you are not on the wrong side of the trade when analysts start publishing articles on this stock and drive aided investor awareness. For those that want to "technical trade" this stock I encourage you to read "Enter My Trading Room". I am not a big fan of technical trading on OTC stocks but there are some indicators that hold up regardless of the market cap.
Second, for the pumpers and dumpers, those of you who trade 10k-50k shares periodically - you cannot be making that much money. If the average 10-day and 90-day trading volume is around 950k shares that would mean $95k dollars is trading daily with the average share price around $0.10. This means you might get lucky to make $1-$2k a trade which seams like pennies on what could be made in the larger picture.
Third, for the fundamental traders out there.... according to Bloomberg there are 150 million shares outstanding. Let's assume they exercise the two warrants for another 51 million shares brining the total up to approximately 200 million shares. Now let's look at revenues:
Q4 2016 - $1.7 m
Q1 2017 - $2.2 m (a 30% CAGR)
If we assume a consistent CAGR of the same product line (not to include the new products launched this year) then we could assume the following projected revenues for this year.
Q2 2017 - $2.85 m (projected)
Q3 2017 - $3.67 m (projected)
Q4 2017 - $4.37 m (projected)
These revenue numbers mean 2017 YE top line numbers could be approximately $13.09 m. Now if we add on the promised Korea payment, in order for them to keep exclusivity rights, then there is another $1.94 m of projected revenue that will be coming this year (and potentially in future years). The reason I did not include the Korea deal in the revenue numbers above was due to only $60k being included in the Q1 revenue numbers which made up only 2.7% of overall Q1 sales.
This could bring 2017's annual revenue target to $15.03 m ($13.09m + $1.94m).
Now if we add on revenue for products launched in 2017 (not including Fluticare) and discount their potential contribution to 10% of the gross aggregate revenue of the other products, then we could anticipate another $1.3 m of additional revenues.
This could bring 2017's annual revenue target to $16.33 m ($15.03m + $1.3m).
Finally, if we consider Fluticare's launch in Q4 of 2017 and use INNV's stated 12 month projected income of $10m-$15m AND we assume 70% of that revenue is generated between March and September (in the US) then 30% would be generated in the other 6 months. Assuming $12.5m of first year revenues, then $3.75m is generated "out of season". Divide that by six months and we get $675k generated per month. This would project $1.875m generated in Q4 2017.
This could bring 2017's annual revenue target to $18.02m ($16.33m + $1.875m).
Since INNV is operating on a 78% gross margin then we could project gross revenues of $14.19m. If we assume the previously mentioned CAGR of 30% then we could assume the following five years of gross revenues:
2017 - $14.19m
2018 - $22.48m (adjusted for a full year launch of Fluticare)
2019 - $29.22m
2020 - $37.99m
2021 - $49.38m
If we assume add up the projected future cash flows, discount cash flows at a rate of 10%, and calculate NPV (net present value) then we get a market value of INNV of $153.26m. We then divide this value into the outstanding shares to come up with a projected/anticipated stock price of:
$153,260,000 / 200,000,000 Share = $0.76 per share
Now that we know that we can massage with the figures. If gross revenues increases higher than assumed as sales of the core products, overseas, increase more (noting most of the Q1 sales were primarily US based), or if Fluticare sales come in higher than projected than we could see the stock price go higher, OR if INNV does not execute all of the additional warrants then we could see additional price appreciation.
Final note:
All eyes will be on Q2/Q3 revenue and expenses. If margins can stay under control and expenses stay in line with what they have been then it is highly probable this stock could be a 7-8 bagger this year. Furthermore, a diamond that EVERY INVESTOR should know (buried deep in the financials), is the Stock Holder Equity. We saw a 200% increase ($1m to $3m) in ONE YEAR. With the numbers estimated above there is a strong probability that stock holder equity jumps over $5 mil by Q3 which would setup an up listing to the NASDAQ in Q1 of 2018 making the stock more available to many more investors (namely institutions than cannot own OTC stocks). This would mean the stock would jump even higher.
Bottom line - in my opinion, trade at your own risk because if a few targeted micro-cap analysts with a wide following of subscribers start writing about this stock over the coming months you will not be able to buy this stock for $0.50, let alone $0.10 a share any more.
***The above noted information is based on public information. This is an opinion statement and it is encouraged that all investors perform their own due diligence. Investing comes with risk and investors should invest based on their individual risk tolerances. At the time of writing this opinion statement I own INNV.
