MyDx Inc (OTCMKTS:MYDX) Is Up, But There's Plenty Of Run Room Yet

On October 5, 2016, we highlighted life sciences microcap MyDx Inc (OTCMKTS:MYDX) as being a potential growth stock on our near term radar. In this piece, MyDx Inc Is Nearly Clear Of Its Perfect Storm, we outlined the downside pressures on the company's market capitalization, and suggested that there was a pending upside reversal and that – at it's then price of $0.01 a share, there was plenty of upside to be had on a well overdue revaluation.The company closed out the session in the US October 19 for a little over $0.05 a share – a 400% gain since our noting its potential. Out thesis was simple – we just couldn’t see how a company with a technology as potentially game changing as that of MyDx's lead asset could be valued so low, and sooner or later markets would catch on to its potential and start accumulating shares. More than 170 million shares have changed hands since October 7, signaling to us that this accumulation has very much begun, and we think there's much more run room for growth on the table.Before we get in to why, and for those not familiar with MyDx, here's a quick introduction to the company and its tech.It's a San Diego based life sciences operation with a mission statement as follows: ensure that people can trust and verify what they put in their bodies. To this end, the company has developed a kit that serves as a portable chemical analysis tool. It's handheld, cheap to run, relatively cheap to buy and – here's the kicker – can adapt to analyze a huge variety of samples, from food to drink to air quality to plant material. In this last category is cannabis – something we'll get to shortly.The company is currently in what we might call an awareness phase. Its product is ready to go, and shipping in many cases, and MyDx is upping its sales force and marketing asset allocation to try and get the word out there about its product. As far as we aware, and we've done plenty of digging, there's no other product like this on the market – at least one that is low cost, portable and available to the general public.This tells us that the company shouldn’t have to spend too much of its marketing budget on differentiation – all it needs to do is make people aware that the technology exists, and that they can afford it. This leaves plenty of scope for non traditional marketing campaigns (which can be both cheaper and more effective than standard alternatives) – campaigns similar to the water purity in Tampa strategy we've already seen the company put in motion, as discussed in our previous coverage.So what's behind our thesis that there's further run room?Well, a couple of things. First, we're about to get earnings for the third quarter, and we think the numbers are going to underline some considerable growth both on a YoY and a QoQ basis. This alone would serve as an upside catalyst, but there's another element that we think is going to play into the picture.On November 8, just a week or so before we expect the company's earnings report to hit press, California will vote on its marijuana legalization ballot. If the state votes in favor of recreational legalization, the entire pot industry will get a huge boost. MyDx's analyzer is the only commercially available, transportable tool available that can deliver instant quality reports on marijuana. As the number or recreational users increases, and the number of licensed retailers increases concurrently, users are going to want to be able to test the quality of what they are paying for quickly and easily. The MyDx analyzer allows them to do just this, and so while we expect the company will pick up some immediate gains on the back of a legalization nod, we think these gains will hold firm and form the foundation of further growth going forward based on the product's rapidly growing potential market.Subscribe below and we will bring you more undervalued opportunities like this one across a host of sectors completely free!Disclosure: We have no position in MYDX and have not been compensated for this article.