This is a covid diagnostic company with several pop up sites all over the US.
Since Mid Jan the number of covid cases has dropped off significantly and vaccines are rolling out.
If you google new covid cases for US you can see it has dropped significantly since mid jan and has flatlined, which correlates very well with this stock. If you look at Canada you can see covid cases starting to ramp up again.
Currently I believe the market is making the assumption that we are homefree will no longer need testing and thus MEDV is done for, but I do not believe that this is the case and there are several things that the market is failing to take into account
1) 5 million dollars in cash was raised in Jan at 0.25
2) They have generated a ton of revenue with decent margins on their test of 55% and have generated a decent size of revenue since they have started testing, so they are likely at strong financial position.
3) A third wave will likely lead to more cases
4) Vaccination is not necessarily permenant so people will need testing to confirm if they show immunity through testing.
5) There will likely be some kind of requirement whether vaccinated or not to confirm immunity for indoor functions . as you can see in cali this is the case.
I am sure there will be similar requirements throughout America in efforts to control the outbreak.
6) At Jan on their highest amount of business they generated 7.1 m in rev based on 73,973 Tests at an Average Price of $96 . For February they generated 3 m rev based on 20,574 Tests at an Average Price of $99 per Test .On their worst month for march they generated 2 million in revenue based on 20,574 Tests at an Average Price of $99 per Test.
So for this 3 months they generated 12 m in revenue and if we assume 50% margins thats 6M cash in addition to that 5 m they have raised putting them at 11 million cash on hand so far. These are rough estimates but
Their marketcap is only 36.6 m . I believe with the upcoming third wave and taking these other factors into consideration testing will be required atleast for the midterm. By that time this company would had generated a great deal of revenue and possibly even have a cash position near the current marketcap of 36.6.
Here is also another thought in regards to telemedicine.
Their pop up locations is quite interesting and can have many implications for a tele diagnostic features, especially for rural areas, where they can do other diagnosis beyond Covid-19, in which they would have an assistant that will be at the physical location in charge of the equipment while the doctor will be interviewing the patient. This has got me thinking about the limitations of telemedicine as most people will likely have a cheap webcam and microphone making the diagnosis through telemedicine quite limited, so with standardized equipment across multiple locations it can lead to better quality diagnosis from doctors.
When this is implemented they would have generated a lot of revenue and profits and have these pop up sites across multiple locations already.
Here is the so far, which of course looks quite as we are in a strong downtrend. However, here are some factors.
1) we can see we broke this trendline and it may be going for the retest of the trendline
2)We have support at 0.17
3) we have decreasing along this downtrend, indicating that it a trend that should not be trusted.
4) We have a possible forming, but we will need strong green day to confirm this divergence.
Based on the reasons I listed I believe DCA into this can be quite rewarding for both short term and long term.
Comment: lots of divergence inside a wedge