While fears of a Coronavirus outbreak have rattled the stock market, certain vaccine stocks have been on the rise on Coronavirus hype. Small caps like NanoViricides, Inc. (NNVC), Vaxart, Inc. (VXRT) and Co-Diagnostics, Inc. (CODX), among others have been on the move. The hype has hit the domestic Chinese market too with China Pharma Holdings, Inc. (CPHI) more than doubling in price on heavy volume in the last two weeks. Chinese alternative medicine stock like China SXT Pharmaceuticals, Inc. (SXTC) have picked up as well as there is expectation that a desperate population will buy more of these type of products in order to increase their immune system. That leaves us with one undervalued stock that we have bought on Coronavirus hype but are staying for the undervalued balance sheet. We are up to 869 followers despite not giving out a lot of alerts, a fact that we think is indicative of a successful, diligent and prudent stock picking history. If you like our picks you can follow our blog by clicking the follow button on the top of the left hand panel. You can also follow us on Twitter @StockTradePicks. We have over 4,000 followers on Twitter and we first alerted our pick on Monday morning.
The hype has hit Shineco, Inc. (TYHT), another Chinese alternative medicine company, with the stock up over 10% to $0.63 on over a million volume at lunch today. But it hasn't run so much like CPHI or NNVC that we think the run has just begun. The difference between TYTH and the other vaccine or alternative medicine companies is its strong financials. Review the balance sheet ended September 30, 2019:
TYHT has $37.6 million in cash and $81.1 million in total assets against $10 million in liabilities while it trades at only $18 million market cap. With 27.33 million shares outstanding, its cash per share is $1.38. Subtracting liabilities from that, its cash per share is still $1.00. With $70 million in shareholder's equity, its book value is over $2.50 per share. Yahoo Finance confirms all of these stats.
It's not unusual for a stock to trade well below cash value, if the company has no revenue and is burning a lot of cash each quarter. That is not the cash for TYHT. Last quarter's revenue was over $7 million and net loss from operations was $1.8 million. TYHT is a money losing company, but it's not so bad off that it should be trading at less than half its cash value. Plus with the Coronavirus fears, we can expect sales to go up as people will buy more products to try to improve their immune system. Mask companies and vaccine companies have been on the rise. Chinese herbal companies look to be next.
Disclosure: We are long TYHT
The hype has hit Shineco, Inc. (TYHT), another Chinese alternative medicine company, with the stock up over 10% to $0.63 on over a million volume at lunch today. But it hasn't run so much like CPHI or NNVC that we think the run has just begun. The difference between TYTH and the other vaccine or alternative medicine companies is its strong financials. Review the balance sheet ended September 30, 2019:
TYHT has $37.6 million in cash and $81.1 million in total assets against $10 million in liabilities while it trades at only $18 million market cap. With 27.33 million shares outstanding, its cash per share is $1.38. Subtracting liabilities from that, its cash per share is still $1.00. With $70 million in shareholder's equity, its book value is over $2.50 per share. Yahoo Finance confirms all of these stats.
It's not unusual for a stock to trade well below cash value, if the company has no revenue and is burning a lot of cash each quarter. That is not the cash for TYHT. Last quarter's revenue was over $7 million and net loss from operations was $1.8 million. TYHT is a money losing company, but it's not so bad off that it should be trading at less than half its cash value. Plus with the Coronavirus fears, we can expect sales to go up as people will buy more products to try to improve their immune system. Mask companies and vaccine companies have been on the rise. Chinese herbal companies look to be next.
Disclosure: We are long TYHT
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