Steve Clark

Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.
Riot Blockchain Inc. (NASDAQ:BIOP)

Riot Blockchain Inc. (NASDAQ:BIOP) Quits Diagnostic Equipment Business

Riot Blockchain Inc. (NASDAQ:BIOP)

Shares of Riot Blockchain Inc. (NASDAQ:BIOP) gained 18.1% after the maker of diagnostic machinery announced it was rebranding itself to focus on cryptocurrency and blockchain businesses. The company has since announced a strategic investment in Coinsquare Ltd, a leading digital currency exchange company.

Riot Blockchain Inc. (NASDAQ:BIOP)

Riot Blockchain Bitcoin Push

The rebranding push has resulted in the stock more than doubling in value since the start of the month. BIOP is up by more than 100% for the year as investors apparently remain confident about its prospects in the cryptocurrency business.

However, it is not the first company to be rewarded heavily by investors after expanding into the cryptocurrency space. Overstock.com and MGT Capital Investments also experienced astronomical increases in value after expanding their operations into the bitcoin space.

Riot Blockchain Inc. (NASDAQ:BIOP) has enjoyed a fair share amount of drama. Last year Venaxis acquired Bioptix Diagnostics and then renamed it Bioptix Inc. The acquisition quickly turned nasty after major shareholders accused the company’s executives of an “inside” job to benefit themselves.

In January, the company also found itself in trouble after three board members tendered their resignation. The company afterward announced job cuts as it sought to stay afloat by pursuing strategic alternatives.

Fast forward, Riot Blockchain is hoping to reinvent itself by investing in blockchain technologies and companies.

“With new applications being developed for blockchain every day, this is a rapidly growing and evolving market. We are excited to have partnered with and led an investment in Coinsquare, a company we believe is well positioned to capitalize on the opportunity in this sector,” said CEO Michael Beeghley.

Riot Blockchain Acquisition Play

Riot Blockchain Inc. (NASDAQ:BIOP) has paid a few million dollars for a 12% stake in Coinsquare. The company has also acquired warrants which it can use to increase its stake to 20%.

The Chief Executive Officer has also announced plans to buy companies focused on bitcoin mining, blockchain, and associated software. The deals are to be financed by a combination of cash and stock. In order to raise cash, the company is selling patents and intellectual property to a private company. The company expects as much as $2.5 million from the transactions.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $BIOP and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

LiNiu Technology Group (NASDAQ:LINU)

LiNiu Technology Group (NASDAQ:LINU) Signs Strategic Agreements

LiNiu Technology Group (NASDAQ:LINU)

LiNiu Technology Group (NASDAQ:LINU) experienced a surge in stock price in Friday’s trading session, following the launch of an electronic trading platform dedicated to the Chinese agricultural industry. Shares of the company more than doubled in value, after gaining 115% to end the week at $2.35 a share.

LiNiu Technology Group (NASDAQ:LINU)

LINU Stock Performance

Friday’s rally follows a sell-off wave that had plagued the stock and pushed it to multi-year lows. While the stock is up by more than 40% for the year, it is still down by more than 70% from the $4.20 a share mark that was recorded in June.

Renewed investor interest in the stock follows the signing of a strategic cooperation agreement with The Peoples Insurance Company of China Limited’s (PICC) Guangzhou branch. Pursuant to the agreement, the two are to work on the development of new insurance products tailored for local farmers and the greater agriculture industry.

Guangzhou LiNiu will also promote PICCs insurance products on its LiNiuYang trading platform as part of the agreement.

“We are pleased to be working closely with PICC to help further enhance our presence in Guangdong province while devising new products in concert with PICC that should provide additional benefits to customers of our LiNiuYang platform,” said Mr. Wang Shun Yang, co-Chief Executive Officer of LiNiu Technology Group.

SGALP Collaboration

The PICC agreement builds on a strategic cooperation agreement that LiNiu Technology Group (NASDAQ:LINU) signed with Shou Guang Agriculture Logistic Park. (SGALP). Under the terms of the agreement, the two companies are to co-operate on product offerings, information resources, and consumer management.

LiNiu Technology Group (NASDAQ:LINU) expects the collaboration to increase its annual trading amount. Guangzhou LiNiu, on the other hand, is to earn additional commission income through an increase in daily traffic on its platform.

“We are pleased to embark on our new relationship with SGALP, which we believe will be a key strategic alliance that should provide a significant boost to our LiNiuYang platform, while allowing us to further utilize our technological capabilities to the benefit of SGALP,” said Mr. Wang Shun Yang, co-Chief Executive Officer of LiNiu Technology Group (NASDAQ:LINU).

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $LINU and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

APEG Energy II L.P.

How U.S. Energy Corp. (NASDAQ:USEG) Trimmed Debt By 84%

U.S. Energy Corp. (NASDAQ:USEG)

Shares of U.S. Energy Corp. (NASDAQ:USEG) gained 26.7% after the energy company announced plans to reduce its outstanding debt through an exchange transaction with APEG Energy II L.P. The company’s board of directors has approved the transaction.

U.S. Energy Corp. (NASDAQ:USEG)

Debt Exchange Agreement

Under terms of the agreement, U.S. Energy Corp. (NASDAQ:USEG) will exchange $4.4 million of debt, drawn under its credit facility, for 5,819, 270 shares at a par value of $0.01 a share. Unpaid interest on the credit facility is to be paid in cash at the closing of the transaction.

Completion of the transaction will result in APEG holding approximately 49.9% of the U.S Energy Corp’s outstanding common stock.

“With a transformed and deleveraged balance sheet and an experienced management team like theirs, we see tremendous opportunities for growth and value expansion for both U.S. Energy and Angelus Private Equity Group investor,” APEG in a statement.

USEG Investor Reaction

A move to trim debt went well with investors, as seen by the stock spiking to highs of $1.30 a share before it fell to end Thursday‘s trading at $0.95 a share. However, the stock has underperformed the overall industry and is down by more than 10% for the year.

U.S. Energy Corp. (NASDAQ:USEG)’s Chief Executive Officer, David Veltri, attributes the company’s poor performance to a decline in global commodity prices that has put tremendous pressure on the balance sheet and cash flows. However, he remains upbeat about the energy company’s long-term prospects at the back of the new partnership with APEG

“This Transaction is transformative for U.S. Energy Corp. (NASDAQ:USEG), and, if completed, will reduce the Company’s existing debt by 84% while saving the Company $0.4 million in annual interest payments. We believe that the Transaction is critical to unlocking shareholder value in the Company, restoring access to outside capital and allowing the Company to resume participating in growth,” said Mr. Veltri.

Standstill Agreement

In connection with the Debt Exchange Agreement, U.S Energy Corp has entered into a Standstill Agreement with APEG Energy that will be in effect for one year from the closing of the Transaction. Pursuant to the Standstill Agreement, APEG is required to vote its shares in proportion with the non-APEG shares on all matters. The agreement also includes restrictions that prevent the company from acquiring additional shares of U.S. Energy Corp. (NASDAQ:USEG).

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $USEG and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Medical Transcription Billing Corp (NASDAQ:MTBC)

Why Medical Transcription Billing Corp (NASDAQ:MTBC) Boomed

Medical Transcription Billing Corp (NASDAQ:MTBC)

Shares of Medical Transcription Billing Corp (NASDAQ:MTBC) more than doubled in value after the provider of health and cloud-based clinical and practice management solutions announced the launch of talkEHR. The stock was up by 109% as the company confirmed the signing of customers in 42 states for the next generation electronic health records solution.

MTBC 200% Rally

Tuesday’s rally capped an impressive run as Medical Transcription Billing Corp (NASDAQ:MTBC) continues to trade in an uptrend. MTBC is up by more than 200% for the year and is outperforming the overall industry. It awaits to be seen if the stock will continue to rise as it closes in on its 52-week high of $3.84 a share.

Medical Transcription Billing Corp (NASDAQ:MTBC)

Investor confidence on the stock has strengthened in recent days on reports that talkEHR continues to receive an overwhelming positive response from physicians. The next generation SaaS HER solution is designed to utilize natural language processing and artificial intelligence to automate key components of patient charting. The platform also provides solutions for electronic claims submission, electronic prescriptions, and appointment scheduling.

Medical Transcription Billing Corp (NASDAQ:MTBC) is currently offering the software at no charge. However, users who wish to upgrade to full-service package will have to pay the company 2.95% of physician’s revenues.

“We’re very pleased to have already signed new talkEHR clients representing 30 unique specialties, spanning across 42 states plus Guam and Puerto Rico. talkEHR is a phenomenal addition to our fully integrated, industry leading, cloud-based and mobile platform and we expect it to play an important role as we continue to expand our customer base,” said Karl Johnson SVP Sales and Marketing.

Debt Repayment

Separately, Medical Transcription Billing Corp (NASDAQ:MTBC) has made the final payment of $5 million for the acquisition of New Jersey-based medical billing company MediGain. The payout follows the settlement of the company’s debt with Opus Bank.

Medical Transcription Billing Corp (NASDAQ:MTBC) got funds for the repayment of the debt and the MediGain transaction from the issuance of 240,000 shares of convertible Series A preferred stock. The company generated gross proceeds of $6 million from the offering.

According to MTBC president, Stephen Snyder, repayment of the two transactions combined with year over year growth leaves the company well positioned for continued growth.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $MTBC and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) Spikes On FDA Review

Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL)

Shares of Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) gained 32.7% after the clinical stage biotech company announced the results of a recent meeting with the U.S. Food and Drug Administration (FDA). According to the company, the Agency does not intend to convene a panel of independent physicians to discuss Tavalisse following mixed results from pivotal trials.

Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL)

Tavalisse Opportunity

The clinical stage biotech has already filed a New Drug Application for Tavalisse, formerly Fostamatinib, in patients with chronic immune thrombocytopenia (ITP). The FDA has since indicated it will meet the Prescription Drug User Fee Act Action date for the application review, set for April 17, 2018.

“Our positive interactions with the FDA, including their customary biomedical monitoring (BIMO) inspections at our facilities and clinical sites, are in-line with our expectations and have progressed well. We will continue to work closely with the agency and remain committed to bringing Fostamatinib to patients with ITP,” said Anne-Marie Duliege MD Executive Vice-President.

Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) gapping higher on Tavalisse news does not come as a surprise given what is at stake with the candidate drug. Immune Thrombocytopenia affects between 60,000 to 120,000 Americans. Accordingly, the drug, once approved, could generate peak annual sales of up to $350 million.

Monday’s rally helped reverse a strong downtrend that had gripped the stock. RIGL is currently trading at a key resistance level, waiting to see if the momentum is strong enough to push the stock higher. Taking into consideration the 157% rally, the stock is now up by more than 20% for the year.

Mixed clinical trial results could, however, scuttle investors’ confidence on Rigel Pharmaceuticals should it come under scrutiny from the FDA. The stock fell on huge volume late last year after the drug posted disappointing clinical trial results.

Corporate Highlights

Separately, the Compensation Committee of Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL)’s Board of Directors has approved the grant of inducement stock options for the purchase of 377, 500 shares by eleven employees. The stock options up for purchase have an exercise price of $2.27 a share.

In addition, Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) has confirmed the appointment of Mr. Brian L. Kotzin M.D. into the board of directors. Kotzin joins the board with three decades of experience spanning areas of immunology and inflammation.

“ We look forward to working with Dr. Kotzin and benefitting from his strategic counsel, as we continue to evolve our pipeline and move our new IRAK molecule into clinical development,” said CEO, Raul Rodriguez.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $RIGL and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

This is why Jaguar Health Inc. (NASDAQ:JAGX) Health Dropped 50%

Jaguar Health Inc. (NASDAQ:JAGX)

Jaguar Health Inc. (NASDAQ:JAGX) shares fell over 50% after the natural-products pharmaceutical company announced the pricing of an underwritten public offering of 21.3 million shares. The company expects gross proceeds of $4.25 million from the offering priced at $0.20 a share. The offering should close on or about October 3, 2017.

Investors Reaction

Investors pushed the stock to a new all-time low on the public offering news after the stock broke a key support level. Jaguar Health Inc. (NASDAQ:JAGX) has already recorded a new 52-week low of $0.17 a share as it remains under immense selling pressure.

Jaguar Health Inc. (NASDAQ:JAGX)

The offering appears to have spooked some investors given that it could plunge the company into more debt. The offering could also result in further stock dilution. Jaguar Health Inc. (NASDAQ:JAGX) plans to use proceeds from the offering for general corporate purposes as well as for working capital.

Part of the funds are also to be used for commercialization of the company’s FDA approved human prescription drug Mytesi. The company’s subsidiary Napo Pharmaceuticals has already filed a Chemistry Manufacturing and Controls (CMC) supplement with the U.S Food & Drug Administration (FDA).

Mytesi Commercialization

Mytesi is approved for symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS. The two companies are currently pursuing approval for its use in the treatment of chemotherapy-induced diarrhea for patients undergoing chemotherapy for cancer. The drug is also being tried for the treatment of rare disease indications for infants and children with congenital diarrheal disorders.

“Chronic diarrhea remains a significant complaint of people living with HIV/AIDS, particularly those who are older and have lived the virus in their gut for over 10 years. This is a growing demographic of the HIV community, and Mytesi® is the only antidiarrheal studied in and U.S. FDA-approved for the symptomatic relief of noninfectious diarrhea,” said Pete Riojas, Napo’s national sales director for Mytesi

Jaguar Health Inc. (NASDAQ:JAGX) subsidiary has already expanded its national sale force as it moves to market Mytesi in the U.S. For starters, the company will target sales in New York, Miami, Atlanta and surrounding regions. The drug is currently available in all the 50 states through the Medicaid program. It is also covered by the top 10 commercial insurance plans, which represent more than 245 million American lives.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $JAGX and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Tuesday Morning Corporation (NASDAQ:TUES)

Tuesday Morning Corporation (NASDAQ:TUES) – Push For CEO Ousting

Tuesday Morning Corporation (NASDAQ:TUES)

Tuesday Morning Corporation (NASDAQ:TUES) shares jumped 11.1% after the off-price retailer reaffirmed its FY2018 outlook. The retailer expects same-store sales to increase 2% – 5% in addition to a significant improvement in EBITDA. The company expects its first-quarter sales to increase by the same amount.

Disappointing Financial Results

Shares of Tuesday Morning Corporation (NASDAQ:TUES) broke through a key resistance level, on the embattled retailer reaffirming its full year and first quarter sales. The remarks support the uptrend that began last month after the stock had plunged to multi-year lows. However, the stock is still down by more than 50%, year to date.

Tuesday Morning Corporation (NASDAQ:TUES)

The off-price retailer is under pressure to survive at the backdrop of a vicious retail environment that continues to dent its prospects. The retailer has already relocated 52 stores, opened 21 and expanded 13, as it continues to explore ways of accelerating sales growth.

Tuesday Morning Corporation (NASDAQ:TUES) felt the wrath of Wall Street after reporting a severe decline in earnings for the better part of the year. For the fourth quarter, the company says it generated a net loss of (-$17.1) million which led to a full year net loss of $32.5 million.

Management Changes

The underperformance has already led to calls for the resignation of the current Chief Executive Officer, Steve Becker. Jeerddi II LP and Purple Mountain Capital Partners LLC which own 2.4% of the company are pushing for management changes. The two firms are pushing for the appointment of Michael Barnes as the new CEO to replace Becker.

The board of directors has remained firm; refusing to cave into pressure from the two stockholders. Two hedge funds have since threatened to publicly nominate Barnes and Purple Mountain founder James Corcoran for the board. Calls for the firing of the current CEO comes on the heels of his appointment to the position.

“It is regrettable that Jeerddi has chosen to disregard the company’s progress and, instead, propose what we believe is an ill-advised director slate while pursuing a disruptive and protracted proxy fight at the expense of all Tuesday Morning stockholders,” said Terry Barman, chairman of the company’s board of directors.

Tuesday Morning Corporation (NASDAQ:TUES) will hold its annual general meeting on November 15, where shareholders are to vote for members of the board of directors.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $TUES and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Avinger Inc. (NASDAQ:AVGR)

Avinger Inc. (NASDAQ:AVGR) Awarded CE Mark

Avinger Inc. (NASDAQ:AVGR)

Shares of Avinger Inc. (NASDAQ:AVGR) more than doubled in value after the company announced its system for the treatment of in-stent restenosis, Pantheris® Lumivascular atherectomy has been awarded a Conformité Européenne (CE) marking designation. The stock was up by 119% to end Wednesday’s trading session at $0.46 a share.

Avinger Inc. (NASDAQ:AVGR)

AVGR Stock Performance

However, Avinger Inc. (NASDAQ:AVGR) continues to trade near all-time lows after plunging from its January highs of $3.50 a share.

The CE mark which validates the use of the in-stent restenosis system in Europe could be the catalyst that will help push the stock up from the current lows. Demand for alternative treatment options for the condition, which normally results in narrowing of blood vessels, is on the rise.

“CE Marking for this particular indication is an important milestone for Avinger that addresses an area of unmet clinical need for patients suffering from PAD. Onboard image guidance coupled with directional plaque excision offers the interventionist clear benefits when treating in-stent restenosis and represents another opportunity to improve patient outcomes,” said CEO, Jeff Soinski.

Class Action Lawsuit

However, Avinger Inc. (NASDAQ:AVGR) remains the subject of increased scrutiny on Wall Street over claims that certain officials failed to fulfill their fiduciary duty to shareholders on or around January 30, 2015. A class-action lawsuit filed by Bronstein, Gewirtz & Grossman, and LLC alleges that the Registration Statement and Prospectus that Avinger used for its Initial Public Offering contained materially false and misleading statements.

The lawsuit goes on to claim that Avinger Inc. (NASDAQ:AVGR) did not have an adequate sales and marketing personnel needed to accelerate sales growth for the lumivascular platform products. The law firm also alleges that the company failed to notify investors that it was experiencing problems with the robustness of the lumivascular platform devices.

Bronstein, Gewirtz & Grossman, LLC claims that Avinger failed to disclose that physicians and hospitals were demanding more extensive and comprehensive training before they bought the company’s products.

The filling of the lawsuit follows the share price decline in Avinger Inc. (NASDAQ:AVGR from $13, as of the IPO date, to current lows of $0.46 a share. The class action lawsuit seeks to recover the damages that shareholders incurred on the company providing misleading statements.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $AVGR and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Tintri Inc. (NASDAQ:TNTR) Appoints Michael Lombardo

Tintri Inc. (NASDAQ:TNTR)

Tintri Inc. (NASDAQ:TNTR) shares jumped 7.44% after the storage management solutions provider announced the appointment of Michael Lombardo as the Vice President of Channel Sales. His appointment follows the launch of EC6000 all-flash series and the Tintri Cloud.

Tintri Stock Performance

Analyst sentiments on Tintri Inc. (NASDAQ:TNTR) have turned sour ever since it became a public company. The stock is already down by more than 50% from its IPO price as investors continue to question its long-term growth prospects.

Tintri Inc. (NASDAQ:TNTR)

Fuelling the sell-off wave are reports that the company might have provided misleading statements in the run-up to its Initial Public Offering. According to a number of complaints lodged by law firms, the management team is accused of failing to disclose that the company was experiencing sales attrition as well as distraction and disruption in the business.

Tintri Sales Growth

Sales in the quarter coming in at the lower end of expectations and guidance appears to support concerns that the company might have withheld information from shareholders. Tintri Inc. (NASDAQ:TNTR) has sought to quash the concerns by unveiling new products and reiterating that it is on course to meet its growth targets.

The appointment of Leonardo is seen by observers as a move by Tintri to affirm its commitment to accelerating sales growth. He joins the company with over 20 years’ experience which the company believes will be crucial as he moves to oversee national account teams and sales channels.

“Tintri is continuing to expand on its channel commitment—through training and certifications we’ve helped our partners build their cloud businesses. Now Michael, especially through his experience with national partners, will play a critical role in refining our channel strategy and driving channel sales forward,” said Tom Ellery, Senior Vice President of Americas and Federal at Tintri.

Separately, Tintri Inc. (NASDAQ:TNTR) will be showcasing its newly launched solutions EC6000 series at the Microsoft Corporation (NASDAQMSFT) Ignite conference in Orlando, Florida. The company will also demonstrate its deep integration with the Microsoft ecosystem as it seeks to help joint customers automate storage management and enable a number of enterprise cloud benefits.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $TNTR and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Ascena Retail Group Inc. (NASDAQ:ASNA) Jumps on Q4 Financials

Ascena Retail Group Inc. (NASDAQ:ASNA)

Ascena Retail Group Inc. (NASDAQ:ASNA) shares rallied 6.0% after the retailer posted stronger than expected fourth-quarter earnings. The New Jersey-based retailer posted a 4% decline in same-store sales which was better than the 8% decline analysts were expecting.

Ascena Sales Decline Concerns

The stock had initially rallied to the $2.60 a share mark before it dropped to end Tuesday’s trading session at $2.30 a share. The 6.0% rally did little to reverse a strong selling pressure that has followed the stock this year. Ascena Retail Group Inc. (NASDAQ:ASNA) is currently trading in a downtrend at the lower end of $2.24 -$ 2.63 trading range.

Ascena Retail Group Inc. (NASDAQ:ASNA)

Ascena Retail Group Inc. (NASDAQ:ASNA) has come under pressure in recent quarters over growing concerns of declines in same-store sales. Net sales in the fourth quarter totaled $1.65 billion compared to $1.812 billion reported a year ago. The company attributes the decrease to pricing pressures and store traffic.

Chief Executive Officer, David Jaffe, has since warned that challenging marketing conditions could affect the company’s ability to achieve significant sales growth going forward.

“To be clear, conditions remain challenging – store traffic was down mid-single digits for the quarter, and we are planning for this trend to continue for the foreseeable future. While comp sales performance was several points better than our guide, we were not pleased with the results, and we will not be satisfied until we deliver positive sustained enterprise-level comp sales,” said Mr. Jaffe.

The company plans to support top-line growth by increasing investments in cutting-edge planning and marketing capabilities. Ascena Retail Group Inc. (NASDAQ:ASNA) has also embarked on a cost-saving drive where it hopes to achieve $250-$300 million in cost savings.

Q4 Earnings

Gross margin decreased to $951 million or 57.4% of sales in Q4 2017 from $1.041 billion or 57.5% of sales last year. The decrease was because of a decline in comparable sales as well as an extra one week included in last year’s earnings. The company reported a net loss of (-$16) million or (-$0.08) a share down from a net income of $14 million reported a year ago.

Cash and cash equivalent as of the end of the quarter stood at $326 million with $224 million held outside the U.S. Ascena Retail Group Inc. (NASDAQ:ASNA) ended F2017 with a total debt of $1.597 billion.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $ASNA and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.