Georgi Kamburov

NuGene International Inc (OTCBB:NUGN) Surges Up

by Georgi Kamburov October 1, 2015

Yesterday the stock of NuGene International Inc (OTCBB:NUGN, NUGN message board) enjoyed a rather positive session closing with a gain of exactly 16% at $1.74 per share. The outcome of the trading day was quite impressive but there is no immediately obvious reason for it.

NUGN did publish a new PR early in the morning on Tuesday announcing the results of a limited study to assess the efficacy of the company's Light and Bright Gel. Among the patients of the study 33% experienced a 50% improvement in skin appearance while 56% experienced an improvement of 75%. Encouraging results indeed but on the day of the PR NUGN closed less than 3.5% in the green.

Although NUGN's financials definitely put the company ahead of the majority of pennystocks they are still somewhat underwhelming. As of June 30 the company had:

• $486 thousand cash
• $1.16 million total current assets
• $268 thousand total liabilities
• $536 thousand sales
• $772 thousand net loss

Even with the recent $500 thousand boost achieved through the sale of a 15% Promissory Note the balance sheet remains completely disconnected from the current market of the company of $68.8 million.

Investors should also keep in mind that until not so long ago NUGN were targeted by a massive $4.4 million paid pump. Thanks to the artificial hype created by the numerous waves of hard mailer brochures that were being distributed the stock actually managed to break through $4.50 per share back in June. Compared to the pump high even after yesterday's gains the stock is sitting over 61% lower.

In addition the people who in March 2014 bought 148 thousand shares for just $37,050, that in turn became 11.1 million shares with a price of 0.0033 each thanks to the forward split performed at the start of this year, could still own a portion of these underpriced shares. The gains they could reap at the open market are enormous.

NUGN has several serious red flags that make their stock rather dangerous. Even if you believe in the potential of their products take the time to do your own due diligence before committing to any trades. 

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