Shares in the apparel maker Respect Your Universe Inc. (RYUN) rose to as high as 85 cents Friday on the heaviest volume trading session in over a year. After hiring the accounting firm of Deloitte & Touche LLP last week, RYUN stock showed signs of life for the first time since its run from 0.205 to 2.53 in the beginning of the 2011 summer. With former Sports Authority CEO, David Campisi, about to begin his 7th month as a member of the company, now as CEO, should investor’s confide in the bounce off the historic low set at the end August?
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RYUN Stock Chart
Market Cap: 36.72M
Close: 0.76, up 0.12 (18.75%)
Dollar Volume: $348,078
Average Trade Size: 6,967
Issued and Outstanding: 48,322,128
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A quick look at the recently filed 10-Q shows that the Company only issued 1.6 million shares in the first 6 months of 2012, 1.5 million of which were sold at $1 each with attached warrants. Also, revenues for the three and six months ended June 30 came in at $107,522 and $171,648 respectively with gross profit of $45,726 and $73,940 respectively, roughly 42.5% and 43% respectively. Not bad numbers for a start up Company getting itself out there in a very aggressive way having become a sponsor for UFC just prior to the end of 2011.
However, after the IPO hype fizzled and the penny shares had a few pops to end last summer, RYUN stock settled down and began a slow slide from around 1.38 even after Campisi joined the firm. In June, another 5,882,500 shares went up for sale in anticipation of raising CDN$5,000,125 and still, the share price of Respect Your Universe respectfully held its position through July trending between 0.80 and 0.93. August, however saw the month end with RYUN hitting its lowest point since the IPO, 0.62.
It would be expected that sentiment would be more bullish than bearish on the apparel maker considering their gross profit numbers and the fact that the Company reported $2,087,156 worth of inventory as of June 30, 2012, primarily all of which is finished goods. Using the YTD percentages, that would result in roughly $900,000 in future gross profits which could put a small dent into their somewhat excessive G&A expenses, $2.55 million for the first 5 months of the year.
It’s true you need to build it before they come and Campisi is more than qualified to run such an enterprising niche company. Considering that fat people are just a few steps away from realizing the improvements in their quality of life by joining a fitness program, Respect Your Universe is simply a few distributors away from tipping the scales on their bottom line.
“In every athlete lies the heart of a warrior”
About RYUN Stock
Respect Your Universe, Inc. is a premium performance apparel and equipment company rooted in and inspired by Mixed Martial Arts. Focused on capitalizing on the increasing popularity of MMA by designing, commercializing and marketing a line of premium performance athletic apparel and accessories drawing insights from MMA and athletes, RYU brings innovative design, development and production of premium authentic performance gear with style to mixed martial artists and athlete enthusiasts worldwide.
Click here to view the SEC filings for RYUN.
Bottom Line: RYUN is one of the retail sector penny stocks that is already making a small enough impact in a tough economy that could possibly explode when those factors improve. Selling into a strong market, the athletic market, and with the proven expertise of top level management, RYUN stock is definitely one to keep a close eye on after its bounce of the low last week.
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