Are Penny Stocks Worth It?

Learn everything you need to know in 'Canada's Penny Stock Guide' for FREE from The Successful Investor.

Canadian Penny Stock Guide: Find where to find Penny Stocks that pay well.

 I consent to receiving information from The Successful Investor via email. I understand I can unsubscribe from these updates at any time.

Topic: Penny Stocks

Penny Stocks: Avivagen faces regulatory and marketing challenges

Pat McKeough recently replied to an Inner Circle member looking for an opinion on Avivagen Inc. While the company has the cash to continue research on its alternatives to livestock antibiotics, it faces other challenges, says Pat.

Q: Hello Pat: I wonder if you would give me your analysis and opinion of the company Avivagen Inc. (VIV). Thanks very much!

A: AVIVAGEN INC. (symbol VIV on the TSX Venture; www.avivagen.com) aims to sell replacements to the antibiotics now fed to livestock. It will initially concentrate on the two largest feed segments—swine and broiler poultry. Avivagen operates out of the partnership facilities of the National Research Council of Canada, in both Ottawa and Charlottetown.

For companion animals (“pets”), the company has already created two branded lines of products—Vivamune Vital Health3 Chews and Oximunol Chewable Tablets. Both are meant to improve or maintain quality of life for pets, although Avivagen has yet to bring the products to market.


The winning hand

It’s a bit like going to the casino, but you can do it with less risk. The odds are against most penny stocks—but with the right stock, the gains can be spectacular. Pat McKeough shows you how to increase your chances of uncovering a big winner. Get your free complete guide to investing in Canadian penny stocks.

Read this NEW free report >>


The use of antibiotics to promote growth in beef cattle, swine and poultry has been banned for over 10 years in Europe. More recently, those antibiotics have raised concerns among health authorities and consumers in North America. That’s led to demands for bans here. The company believes that creates a market for its future products.

Avivagen’s exclusive technology to replace antibiotics is known as OxC-beta (fully-oxidized beta-carotene). It believes that OxC-beta can act as a non-antibiotic feed additive to enhance productivity in swine and poultry by improving the conversion of food to body tissue.

Penny Stocks: Holds cash of $3.4 million

The company is using up its cash at a rate of about $500,000 per quarter. It holds cash of about $3.4 million (from a share sale in July 2016), so it has enough to keep its research and development going through 2017. That also takes away the immediate need to sell shares at today’s low price. Any such sale would dilute current shareholder interest.

While the company is positioned to meet any increasing demand for antibiotic-free meat, its OxC-beta technology will require regulatory approval before Avivagen can commercializes it. In most markets, it could take several years to win those approvals. Other applications for OxC-beta, such as pet nutrition, may require less data to win regulatory approval. Still, they will need considerable marketing resources and an effective marketing campaign to attract buyers.

Right now, Avivagen is focused on trial testing OxC-beta in Asian markets, such as the Philippines and Vietnam. Regulations are less stringent there. But it’s uncertain how successful the company will be in proving the product’s value to consumers.

Inner Circle recommendation: We don’t recommend shares of Avivagen.

For our advice on investing with less risk and a greater chance of success, read How to create an investable penny stock list for the best chances of success in the high-risk part of your portfolio.

For our recent report on a Canadian penny stock in the mining industry, read Amerigo Resources ready for rise in copper.

Comments

Tell Us What YOU Think

You must be logged in to post a comment.

Please be respectful with your comments and help us keep this an area that everyone can enjoy. If you believe a comment is abusive or otherwise violates our Terms of Use, please click here to report it to the administrator.