SIXTY SIX OILFIELD (OTCMKTS:SSOF) Spikes Higher

SIXTY SIX OILFIELD (OTCMKTS:SSOF) seems to be repeating the same share price movement that we saw in May 2017.On January 12, 2018, an unexpected momentum made the share price spiked up more than 200%. Right after this powerful move, the market saw a setback of approximately 100% in the share price. We believe that market participants were profiting from the previous stock returns. So, we thought that volatility was not coming back.The market later proved that we were wrong.On February 1, 2018, a new impulse pushed back the share price to attack the previous resistance. The new movement dealt even more stock volume than that of the previous reaction. More than 50 million shares changed hands some days.What's the most interesting of the new stock returns?The market did not receive new information from the company. Check the following chart before we let you know our opinion:

1-month chart for SSOF

Let's quickly revisit the stock price of the company for starters. Although Sixty Six Oilfield Services was incorporated in 1994, the business seems to be operating since the 1950s. The company is focused on supplying drill pipe and rig related equipment to the oil industry through its facilities in Oklahoma City, Germany, and Dubai. Also, SSOF also purchases and refurbishes custom rigs for resale through a joint venture agreement signed with Oklahoma Rig Fabricators and Five Star Rig & Supply (both) of Oklahoma City.

Photo taken from Sixtysixoilfield Website - SIXTY SIX OILFIELD COM USD0.001 OTCMKTS:SSOF

What's going on?

We believe that there are several reasons to explain the increase in the share price. First of all, Medically Minded, Inc., which recently merged with SSOF, launched a new product and signed new distribution agreements. In our opinion, the market is expecting revenues from these new developments. So, the demand for the stock recently increased.

Additionally, the revenues of SSOF for the period ended September 30, 2017, have helped the stock. The new report showed a quarter over quarter improvement of approximately 106% in gross sales. Finally, we need also to point out that short sellers are quitting this company, which is also helping the stock.

Medically Minded, Inc.

We knew that the merger with Medically Minded, Inc. was going to be very positive for the company, that is why we remarked it in our previous report. Medically Minded did not defraud us. In May, the company added Hemp CBD (Cannabidiol) Oil tinctures to its product line. The new launch of these Tinctures, which are liquid CBD (Cannabidiol) extractions that are typically applied under the tongue, was obviously expected to push up the revenue figure of the company. The reaction of the market to the new product was not automatic. But, in our opinion, it increased the interest of market participants. For our readers, bear in mind that the marketing efforts already commenced in May.

Also, the collaboration with World Hemp Oil released in June 2017 was remarkable. The company is helping distribute World Hemp Oil's exclusive 73% CBD Full Spectrum Extract Hemp Oil.

Check out the company's new strategy:

"The average wholesale price in the market is well over $0.05 per mg. The Company will capitalize on its low cost per milligram (as low as $0.019 per mg) to build a wholesale customer database of other formulators and manufacturers who will now be able to offer their customers affordable products that have effective amounts of CBD." Source

Our take is that the new distribution agreement is not another source of revenue. It also shows the recognition of Medically Minded. The company has contacts in the industry, so other operators are interested in signing distribution agreements.

Also, we got to know in May that Medically Minded had executed several sales test marketing of products acquired from Health Synergy, Inc. The result of these tests showed an estimated retail value more than $150,000 on this inventory, not including the Hemp Oil Tinctures. We believe that revenues will run if the company can sell the entire inventory. We need to be alert in 2018.

The Net Revenues were critical

For the market participants who only checked revenues, the best came in the last three months.

In November, the revenues for the third quarter showed $1.4 million in gross sales. As compared to the same period in 2016, the new financial figure represents 106% increase in sales. Additionally, the net income also increased; 112% in comparison to the same quarter of the previous year.

Additionally, on February 1, 2018, the company reported net revenue estimate of $1,142 million on gross sales of $5,957 million at the end of 2017. We believe that it was the confirmation that the market was expecting. The market reaction finally showed up. In our opinion, it made a lot of sense. The company is now expecting year over year improvement of approximately 52% in gross sales and 64% in net revenue. Additionally, margins are also expected to grow from 19% to 24%.

The new catalyst: the new CEO

The company recently elected Dave T. Ho as a new President as well as Chief Executive Officer. Mr. Ho has MFA from Yale University, and said that a new plan would be executed:

"We are excited to announce the start of a new global marketing business." Source

SSOF should explain the new developments soon. So be alert, as the share price could run once again.

Short Sellers and Conclusion

We believe that many short sellers saw the growth exhibited by SSOF. They seem to be closing their positions, which is quite good for the long side. Have a look at the following table:

DateShort Interest% ChangeAvg. Daily Share VolumeDays to CoverSplitNew IssueJan 12, 2018200-95.6115,030,8521.00NoNoDec 29, 20174,55711.915,241,1961.00NoNoDec 15, 20174,0721,936.007,159,4881.00NoNo

Currently trading with a market cap of $1 million, SSOF is an exciting story among small caps. We believe that the company should be on trader's radar.Be sure to check out our coverage on SSOF!

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Disclosure: We have no position in SSOF and have not been compensated for this article.Image courtesy of zeesstof via Flickr