As you know, when we look under the hood of a company that comes into our purview, we must comprehensively assess its strengths, weaknesses, opportunities and threats, much like you would if you were starting a business. On the heels of our last RFT/portfolio protection RFT piece that was laid out in somewhat of a risk analysis format, we thought we’d do it again to once again give you a chance to see how our process of either screening for potential investments, or ideas that can be put to bed.
So, next on the hot seat is Net Medical Xpress Solutions Inc. (OTC:NMXS), a company engaged in providing solutions to the telemedicine industry.
As with many other microcap stocks that come into our internal momentum screening system, we more often swipe left than right, as most fail our initial litmus test of adhering to the conditions that allow it to enter the next phase of our analysis. We did manage to execute a tepid swipe right with NMXS, a stock we had never covered, but were intrigued with it, when at $0.09, it popped up on our screener after it reported strong Q1 2022 financial results on May 4, 2022. Since then, it’s risen to $0.41, a 355% move that we surely could not predict in this current market environment. We had to find out if this move was indeed legit, so we now came to write a quick RFT on the company, which will be made available tomorrow.
In a nutshell, a lot of the revenue reported in the Q1 report came from COVID related services, specifically mobile van testing and software and laboratory services to assist companies wishing to apply for FDA Emergency Use Authorizations (EUA).
Is this just an instance of hype in an environment still trying to cope with pandemic hangover, or should we give the company the benefit of the doubt that there will be some level of permanence and expanded use for its services?
Could this be the next candidate for the Run To One Model Portfolio, our best performing tier one Microcap Model Portfolio?
We have already added one under the radar construction company to this portfolio. NMXS now joins Infinite Group Inc (OTC:IMCI) (report here) as one that’s on our watchlist as we assess red flags, capital raising needs and the staying power of their business models.