Gediminas Jasionis

San West, Inc. (OTC:SNWT) Building Up Hopes Through Stock Promotions

by Gediminas Jasionis March 11, 2010
Buugy_running_on_cash.pngIt not new to hear about stock promoters having fun with San West, Inc. (OTC:SNWT) stock, but the most recent shady payments just beg to be published.

San West has recently spent 421.5 thousand dollars for a campaign to promote their stock. The company might have some ground behind this promotion, and they obviously have the cash to spare. The recent developments though weren't documented through 8-k Filings.  Instead they came in a form of press releases which makes us question the future of their business.

The company's latest activities are built up on expectations and interim press reports with no audited numbers. If they will deliver then it's fine, but at the moment all the information that's in PR's should be taken in as at least somewhat hyped.

According to the announcements we should be expecting to see around $2 million in sales for the spring 2010, which might make them profitable.  To this point we've seen them losing around $200 thousand per quarter.  This possibility of profits is the real question. In the news, the company has never mentioned net profitability issues and with planned $650 thousand in gross profit (32.5% margin) SG&A, marketing and other expenses way down the bottom line.

This doesn't mean the stock will dive down, but is more of a warning message to those expecting it to skyrocket. Press releases are not substantial evidence of growth and should not become a cornerstone of due diligence. For now, Investors are left with the question:  "Would buying into the promotions before the company proves earnings be investing or just gambling?"

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