Sport Endurance Inc (OTCMKTS:SENZ) is a penny play that has started to garner attention as the stock bounces up the chart. The proximate catalyst is the company’s recent announcement it has launched a new direct to consumer nutritional supplement product called Ultra Peak T. The initial reaction is a jump in the stock as the market expects top line numbers to improve. We think that is an obvious and reasonable reaction. That said, there may be some merit in pointing out the company’s 180-day money-back guarantee when next revenues are reported.
According to the company’s release, the product is a natural testosterone booster that is designed to help men over thirty overcome decreasing testosterone levels. Low testosterone has been linked to decreased muscle tone, reduced energy levels, and even depression. The stock has responded with a big move. But the action is thin and we don’t have a lot of technical conviction in the move given the low volume.
Sport Endurance Inc (OTCMKTS:SENZ) promulgates itself as a company that markets and distributes quality dietary supplements products throughout the United States.
According to company materials, “Sport Endurance, Inc. develops, markets, and distributes nutritional supplement products throughout the United States. We believe that improved health contributes to and promotes a higher quality of life. It’s our goal to improve health by providing quality and effective nutritional supplements. Our primary focus is on three areas of health that most directly impact the lives of many active adults – Total Wellness, Performance, and Recovery.”
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According to a 2016 report published by Grand View Research, the dietary supplements market is expected to reach USD 278.02 billion by 2024 with sports nutrition expected to be worth USD 37.16 billion.
“I’m excited to make Ultra Peak T available directly to consumers who are looking for a natural testosterone boosting supplement,” said Sport Endurance CEO, David Lelong. “This product is formulated to help men over thirty become more active and feel more energized.”
The company’s sales materials cite a Harvard Men’s Health Watch: “Some studies have found that men taking testosterone have more cardiovascular problems, like heart attacks, strokes, and deaths from heart disease. Some physicians also have a lingering concern that testosterone therapy could stimulate the growth of prostate cancer cells.”
The article recommends that men at high risk should approach testosterone therapy with extra caution.
This includes men at high risk for prostate cancer; those with severe urinary symptoms from prostate enlargement; heart attack survivors; and those diagnosed with heart disease or multiple risk factors for it. That’s the impetus for the company’s new product.
The direct-to-consumer sales approach is potentially costly, and may ultimately lead to lower margins. But sales growth has begun to show up.
Hence, the stock has responded: We’ve witnessed 36% added to share values of the name over the past week of action, but this action is running counter to the larger trend in the name. However, SENZ has a history of dramatic rallies. What’s more, the company has seen an influx in interest of late, with the stock’s recent average trading volume running approaching 300% above the average volume levels in play in this stock over the longer term.
Traders should note this as important given the stock’s extremely small trading float of 9.8M shares. This type of thing is something to watch out for: a mechanically driven price squeeze can result from this type of mix of small float and ramping attention from traders.
SENZ has virtually no cash on the books, which stands against about $440K in total current liabilities. So, the balance sheet isn’t in great shape at this point. One should also note that debt has been growing over recent quarters.
Nonetheless, the OTC market is clearly focusing on the fact that SENZ is pulling in trailing 12-month revenues of $278, with massive recent top line growth on a sequential quarterly basis (growing at 379.2%). There is one big bogeyman here that we would be remiss in not pointing out: As noted above, the company’s ads offer a 180-day money-back guarantee. The jump in sales is very recent, meaning that the company is likely reporting a number that could be clawed back if the product doesn’t provide results. We will update the story again soon as developments transpire. For continuing coverage on shares of $SENZ stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!