What do you think of Ceapro headquartered in Edmonton?
Thanks for the assignment. Ceapro Inc (CZO TSXV) is using proprietary extraction technologies to harvest active ingredients from oats and other plants. The extractions are used in cosmetics, neutraceuticals, and therapeutics for both humans and animals. The research conducted on your behalf identified growth in sales of 36% but in the last fiscal year total sales only reached $8.89 million. Other factors to consider include a market capitalization of $23.73 million and trading volume over the last thirty days of 116,422 shares. A stock with micro capitalization and low trading value would dictate that CZO should be treated as a speculative investment.
An inspection of the charts will inform my thoughts on this stock.
The three-year chart outlines a stock that took off like an Atlas Centaur Rocket in November of 2014 but has since broken below support along the 50 and 200-day moving averages. The MACD and the the RSI signalled a buy in late November of 2014 but you had to have been fleet of foot to capture the profits. By early January as the shares hit a 52-week high of $0.75, the momentum indicators signalled a sell, and they have been falling off ever since.
The six-month chart depicts the resistance along the 50- day moving average as the stock broke below it in January. The shares struggled with the resistance until late April when the MACD and the RSI generated a sell signal sending CZO to a breach of the 200-day moving average. Worth mentioning is that the bounce off of the April 27 low near $0.35 has met resistance along the 200-day moving average. At the moment there isn’t sufficient evidence to indicate a trend reversal.
CZO should be handled with caution. This stock is a micro cap that is currently trading on thinner than average volume which adds to its risk profile. I like the idea of extracting valuable ingredients from renewable plants such as wheat but the market for those products has to significantly pick up the pace in order drive value into these shares.
Next time I will begin the investigation of a number of stocks including Husky Energy Inc. (HSE TSX) and BCE Inc (BCE TSX) on a request from Gary.
Make it a profitable day and happy capitalism!