A multi-million dollar contract from the Indian government might as well have reinvigorated IMD Companies Inc (OTCMKTS:ICBU) sentiments and prospects. The Company has been under immense pressure in recent months, amidst soaring concerns about its ability to continue operating as a going concern.
IMD Companies Price Analysis
The concerns were put to rest on the announcement of $1.7 billion deal from the Government of India. Investors reacted to the news pushing the stock up 125%. The spike, which came at the back of high turnover in shares, saw the stock breach critical resistance levels on its way to this year’s highs.
The stock is back to where it started at the start of the year. While it is still a shadow of itself after taking a significant hit over the past one year, all indication is that the onslaught is slowly ending.
Given the strength of the upward momentum, all indication is that the stock will make a run for the $0.001 mark, a key psychological level. Above the critical resistance level, bulls could push the stock to the $0.002 mark the next immediate resistance level.
IMD Companies faces immediate support at the $0.0004 on any pullbacks, after the recent spike higher. A breach of the critical support level could see short sellers regaining control and pushing the stock even lower.
What Does IMD Companies do?
IMD Companies casts itself as a holding company that manufactures markets and distributes equipment in the hydroponics industry through its subsidiary. The company is also engaged in the manufacturing, extraction, and distribution in the mining sector.
$1.7 Billion Deal
A rally of more than 100% caught many investors by surprise. For the better of the year, the stock has remained subdued in the market, investor’s sentiments having hit all-time lows. However, the signing of a $1.7 billion purchase order for the supply of Polyvinyl Chloride (PVC) might as well have reinvigorated the IMD Companies sentiments in the market.
The company is to supply approximately 10 million PVC pipes every thirty days, through its subsidiary LCG Pipes, over the course of the contract.
“The company has been working on the details of the purchase order and contract over the last several months and completed the due diligence necessary to sign the contract. All details and materials needed for the increase in manufacturing have been calculated to set up the increase in capacity to produce the PVC Pipes for the orders each month,” IMD Companies in a statement.
IMD Companies is poised to become a fully reporting company given the amount of revenues it is poised to generate from the Government of India Contract. In addition, the contract should go a long way in changing the landscape of LCG Plastic, IMD Companies Subsidiary.
In addition to eyeing revenue opportunities from the supply of PVC pipes, IMD companies have also strengthened its prospects in the mining industry. Mid this year, the company completed the acquisition of SG Minerals Mining Company.
Following the acquisition, the company has already started developing a large mining operation in Nevada where it hopes to extract Gold and Precious Metals.
“We are very excited about the opportunity to have a mining operation in Nevada. One of the reasons we acquired SG Minerals was, so we could expand our mining operations and have them be the ones to create and extract the precious metals. SG Minerals has the background and expertise to endeavor such an operation,” said Richard Wilson.
What Next for IMD Companies After 100% Spike
A recent spike in share price cannot be taken for granted, as it has not come on mere speculation. Instead, it has come on the company signing a groundbreaking deal set to generate significant revenues over the next two years.
After coming under immense pressure over the past one year, there is no doubt that IMD Companies is due for a major bounce back. The company appears to be doing extremely well on its PVC Plastic business through its subsidiary. It has also shown how committed it is when it comes to pursuing opportunities in the mining industry with the acquisition of SG Minerals.
That said, it might be wise to wait for a pullback, after the recent spike higher, to enter a long position, as IMD Companies looks set to finish the year on a high.
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Disclosure: We have no position in ICBU and have not been compensated for this article.