Gediminas Jasionis
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Selling Pressure Continues To Rise For Selectcore Ltd. (CVE:SCG) (PINK:SLXXF)

by Gediminas Jasionis Jun 28, 2011
16scg_chart.pngSelectcore Ltd. (CVE:SCG) (PINK:SLXXF) continues to roll down this week as well, ignoring the recently published news on contract extension as well as reacting negatively to the quarterly results.

SCG lost another 12.8% on Monday as the price remained stuck in a short term downtrend. The trading volume is still strengthening which suggests the selling pressure won't cease quickly. 4.9 million shares traded hands yesterday which is nearly twice the average of 2.53 million.

The stock has no support until 29 cents level, which means it can easily drop another 5 cents, or 14.7%.

5selectcore_logo.jpgIt is interesting to see that the first red day of this downwards action happened after the company announced financial results for the quarter ended March 31, 2011. Despite the adverse reaction the report actually wasn't bad. Compared to the same period in 2010 the key numbers have improved:

• Revenues crawled up 1.3% to $21 million;
• Gross margins increased 104% to 10.7%;
• Finished the quarter with $3.87 million in cash but still had roughly $4.5 million working capital deficit;
• Booked profit of $343 thousand, compared to $112 thousand lost in Q1, 2010.

Furthermore, on June 23, 2011 the company said they have entered into a service agreement with Hudson's Bay Company under which they will continue to provide point-of-sale activation transaction processing for prepaid gift card. The contract was signed for a period of three years, which creates stability for shareholders.

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