Our New Nasdaq Alert is: CRDC
Hello Member,
This morning, we have a unique biotech play that we believe is lining up to make big gains. We are excited to alert you all on it before anyone else. Put Cardica Inc.​ (CRDC)​ on your radar immediately as it's poised to make positive gains all week long.
Priced right at $2.52, CRDC, is looking like a strong candidate for a major turnaround after completing a 1-for-10 reverse stock split yesterday. For those of you who have been following us from the beginning, you know that some of our best alerts have been companies that have recently made these kinds financial moves.
We also checked out to see if the big guys in the company made any reported insider purchases recently and we were happy to find that, yes, the VP, CEO and CFO all made large purchases and own a lot. What's even better is there were purchases made as early as last week. What could the insiders be expecting to see in share price if they all own shares of their company? - Probably something really good.
Purchases made were:
Robert Newell, CFO Feb 12 4,000 shares at $2.60
Julian Nikolchev CEO Feb 11 3,768 shares at $2.70
Gregory Watson V.P. Operations Feb 09 7,500 shares at $2.50
NOTE: amount of shares purchased was adjusted for the reverse stock split.
There are Four very important reasons why we love CRDC:
​CRDC just underwent a 1-for-10 reverse stock split that just cleaned up their dilution problem
Heavy insider buying all last week has prompted us to believe that something big is on the horizon for CRDC
Strong institutional ownership of a company that has a very low market cap
The company has over $18 million cash in hand with a market cap of 22 million
Before we dive any further into CRDC, I highly suggest that you read our ENTIRE report so you can understand how WE do our research.
Cardica Announces 1-for-10 Reverse Stock Split​
REDWOOD CITY, Calif., Feb. 17, 2016 (GLOBE NEWSWIRE) -- Cardica, Inc. (CRDC) today announced a one-for-ten reverse stock split of its common stock, effective as of 12:01 a.m. Eastern Time on February 17, 2016. Beginning at the opening of trading on February 17, 2016, Cardica’s common stock will begin trading on a split adjusted basis, and the number of common shares outstanding will be decreased from 89 to 8.9 million shares.
The primary purpose of the reverse split is to enable the market price per-share of Cardica’s common stock to close above $1.00, which is a continued listing requirement of The NASDAQ Capital Market®. The NASDAQ Capital Market granted Cardica the ability to regain compliance by effecting the reverse stock split. Cardica’s common stock must close above $1.00 for ten consecutive trading days by March 10, 2016 in order to maintain its listing requirements.
Cardica’s stock will continue to trade on the NASDAQ Capital Market under the symbol “CRDC†although it is expected that the letter “D†will be appended to the ticker symbol for approximately twenty (20) trading days to indicate the completion of the reverse stock split. In addition, the common stock will trade under a new CUSIP number 14141R309 following the reverse split.
Get the full report here:
http://finance.yahoo.com/news/cardica-announces-1-10-reverse-130000072.htmlSo what's so important about these reverse stock splits that can produce such great winners for you guys? - Well, here's what happens...
When CRDC needed to grow revenue, they issued lots and lots of shares to sell to anyone interested in purchasing them. This was of generating revenue is risky because it ends up diluting the shares, causing them to be worth less than what they should be.
Concerns about this occurring with CRDC were brought up to the CEO as far back as November, 2015 during an Earnings Call report:
Unidentified Analyst
This is Peter Vaid [ph]. My big question is cash on hand and how will you generate more cash without diluting further?
Bob Newell
The key thing we're doing is accomplishing the milestones we set this before us to continue to expand our effort in Europe with bad centers, to complete our FDA submission and - once we have clearance to get into the U.S. market. We think by doing that will certainly create more value in our company, in terms of cash we have a little less than $22 million in cash and we've reduced our burn rate. So we think that we have adequate cash to pursue our near term goals. We will look for all different alternatives for future financing, including partnering and distribution relationships, and we'll develop an approach that we think is in the best interest of all shareholders.
Well, the best way to fix the dilution of the shares is to buy back as many shares as the company can afford to make the shares worth more because there would be less of them issued out in the market.
That is exactly what CRDC did when it bought back 10 SHARES FOR EVERY 1. And that is exactly why if you look at the share price of the stock, it looks like it jumped from about twenty five cents to $2.52, because there are now 10x less shares and that caused the price of a share to go up 10x.
However, that doesn't mean if you owned 10 shares that all 10 of your shares jumped $2 dollars in share price, it just means that now you only have 1 share priced at $2.52.
But this is great news for future investors because it proves to us that the company is cleaning up its stock and has the money to do so. It also means that the shares aren't diluted as much anymore, meaning the share price should rise more easily off heavy buying.
Cardica, Inc Summary:
Cardica, Inc. designs, manufactures, and markets automated anastomotic systems for use by cardiac surgeons to perform coronary bypass surgery in the United States and internationally.
It offers C-Port xA Anastomosis systems to perform an end-to-side distal anastomosis by attaching the end of a bypass graft to a coronary artery downstream of an occlusion or narrowing; C-Port Flex A Anastomosis systems to enable automated anastomoses to be performed as part of CABG procedures; and PAS-Port Proximal Anastomosis systems to perform an end-to-side proximal anastomosis between a saphenous vein and the aorta.
The company also offers endoscopic microcutter products comprising MicroCutter XCHANGE 30 for use by thoracic, pediatric, bariatric, colorectal, and general surgeons.
In addition, it licenses its intellectual property in the robotics field in diagnostic or therapeutic medical procedures. Cardica, Inc. markets its products through its direct sales force, as well as through independent manufacturers’ representatives and distributors.
The company was formerly known as Vascular Innovations, Inc. and changed its name to Cardica, Inc. in November 2001. Cardica, Inc. was founded in 1997 and is headquartered in Redwood City, California.
Check out their website here to get all the information you need on their developments:
http://www.cardica.com/But how do WE investigate a stock?
We start at Yahoo! Finance, type in the company symbol and immediately take a look at its key statistics.
Take a look at it here:
http://finance.yahoo.com/q/ks?s=CRDC+Key+StatisticsWe look at its shares outstanding AND its float, which indicates to us a fairly decent estimation on how many shares there are out there available to buy and sell on the open market. The shares outstanding dropped from 89 million to 8.9 million, this is great news and it came from the reverse stock split (10-to-1) as you can see there is 10x less shares out there now.
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This leads into point #2 why we love CRDC because as you can see from the key statistics page, CRDC has a market cap of $22 million (very low market cap) compared to $18 million cash in hand (very VERY high for biotech)
Bob Newell acknowledged this point during the Earnings Report in the quote referenced above. This is a very good sign that they have the money to make things quality for CRDC.
Next what we look at is the major holders tab on Yahoo! Finance and boy were we surprised that so many instutions owned a piece of this tiny company. Just take a look for yourself!
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Top institutions including Vanguard have their hands on this tiny biotech. That means a lot when it comes to the core strength of the company. You don't need to analyze why these companies own CRDC you should follow their lead. They wouldn't spend money unless they believed their money would grow from the investment.
As you can see, there's a lot going on with this company and moves are being made from within the company to the major institutional companies of the exchanges. We want you in on this one before any other newsletter and after doing our research, we believe that this company is worth being on your watchlist.
Stay tuned for more news on CRDC. As the news drops, we will report it to you.
Sincerely,
The Team at Momentum Stock Alert
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