Tree huggers who trade penny stocks will be all over this Company which hit our radar screens on Friday after its share price doubled on the filing of its 10-K. SugarMade Inc. (SGMD) popped up as a curious stock to watch on Thursday last week when they announced their participation in a number of upcoming conferences. Seems that insiders were more than cheerful about the filing since its not everyday SGMD stock doubles in price after having dropped from as high as $4.25 on Valentine’s Day this year.
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SGMD Stock Chart
Market Cap: 9.25M
Close: 0.90, up 0.45 (100.00%)
Volume: 48,473
Dollar Volume: $38,177
High: 0.90
Low: 0.45
Trades: 15
Average Trade Size: 3,231
Authorized: 300,000,000
Issued and Outstanding: 10,538,526
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Did you know that even in the digital age we are in, the typical desk jockey/office worker still uses 10,000 sheets of paper a year? Sugarmade looked to lessen the carbon footprint printing and copying leaves on the planet by lessening the damage done by each office worker by creating tree-free paper which can save 400lbs of wood, and 985,000 BTUs of energy, thus reducing greenhouse gasses equal to the weight of an average adult male, slashing wastewater by 913 gallons and reducing solid waste created by 93lbs.
It is proving to be a working business model with Sugarmade’s multipurpose paper being one of the better reviewed products available at OfficeMax. (see here) Further proof of their business model working is in their top-line numbers for the year ended June 30, 2012 with revenues coming in at $141,750 versus $37,629 for the year ended June 30, 2011. Adding in the Inventory as of June 30, and the revenue numbers get an additional $88,798 for fiscal 2012 versus $0 for fiscal 2011.
No question Sugarmade has a long way to go before turning in EBITDA that is positive, but they have a product in the $200 billion industry which is growing a customer base. The G&A is going to be the hard expense item for them fight with.
About SGMD Stock
SugarMade Inc. is a distributor of paper products that are derived from non-wood sources. We believe that our Company has a unique advantage in the market to provide paper products derived from earth-friendly sources to corporations and consumers alike. Our third party contract manufacturers’ use of agricultural residuals, namely bagasse (derived from sugar cane) and bamboo, as opposed to wood products, significantly reduces its manufacturing carbon footprint, energy consumption, and attendant water pollution during the manufacture of its products.
Click here to view the 10-K for SGMD.
Bottom Line: SGMD landed on our penny stock screen Friday and is a curiously interesting niche company to say the least. Will SGMD stock see volume surges following the jump in price from Friday? Considering that the 50 day average volume is just 6,343, it’s unlikely, but it could make for a good long.
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