Borislav Tonev

United American Healthcare. (OTCMKTS:UAHC) Blasts Off

by Borislav Tonev September 13, 2013
UAHC.pngUnited American Healthcare. (OTCMKTS:UAHC, UAHC message board) received its first promotional alert just minutes after yesterday's opening bell. The number of emails by the end of the session had exceeded twenty and the whole touting resulted in around 3.7 million shares changing hands, pushing the dollar volume up to a whopping $788 thousand.

When trading seized, UAHC was standing around 438% above its previously recorded value and pumpers are now more than willing to brag about how good a pick this particular ticker was. When you have a look at the intaday chart, however, you'll see that unless you owned some shares prior to the pump, the margin for profit was tiny. The ticker did reach a high of $0.40 minutes after the open but the short ascend was followed by a sharp correction and once the madness of the first thirty minutes had passed, the movement was mostly towards the bottom of the charts. UAHC closed the session at $0.14 which is 65% below the intraday high and we reckon that this performance is not worthy of titles like "The best of the Best".

Most of the newsletters who took part in the campaign say that they haven't been compensated for their efforts and, quite frankly, we can't say that we're particularly surprised since, at first glance, UAHC looks like the typical stock to be picked up for a free, track-record-improving pump. Trading prior to yesterday has been pretty much non-existed, there's not a whole lot of information available about the company and, unlike Awesome Penny Stocks' latest pick, PacWest Equities Inc (OTCMKTS:PWEI), UAHC has never been pumped in the past. Dig a little bit further, however, and you'll see that there are a couple of differences.

The thing that sets out UAHC from other pumped small cap ventures the most is to be found in the financial statement. Unlike other companies that only have big dreams of succeeding in huge multi-million dollar markets, UAHC have been working for some time and they have managed to achieve something. Here's a recap of the figures found in the latest 10-Q, the one covering the first quarter of 2013:

  • cash: $16 thousand
  • current assets: $2 million
  • current liabilities: $9.9 million
  • quarterly revenue: $2.2 million
  • quarterly net income: $306 thousand

It's pretty clear that there is still quite a big working capital deficit but when you compared the numbers above with the ones found in the previous reports, you'll see that they have managed to reduce it. What's more, they have finally reached profitability (a distant dream for the majority of penny stocks) which should normally indicate a bright future. Is it all good news, though?

NHLI.pngWell, we're not so sure. Indeed, UAHC are showing signs of progress, but when you take a look at the three-year chart, you'll see that nobody seems all that bothered about it. This could make selling the stock rather difficult once the promoters are gone and the ongoing pump itself brings its own problems. Nouveau Holdings Ltd (OTCMKTS:NHLI) showed us yesterday how horrific the results of a promotion could be, regardless of whether it's paid or not.

Another thing to consider while making your investment decision is the name of UAHC's CEO. Mr. John Fife is something of a celebrity in Pennyland and when you do a quick check, you'll see that he is featured in numerous filings issued by all sorts of small cap companies. There's nothing wrong with that, but what we do find disturbing is the fact that the SEC charged him and one of his hedge funds with engaging in a fraudulent market timing scheme back in 2007.

Just for the record, according to one of UAHC's latest Form 4's, Mr. Fife currently owns around 9.7 million common shares, 5.6 million of which were acquired recently and were valued at $0.0043 per share.

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