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Chromadex Gets A Supplemental Boost From Stock Guru (CDXC)

ChromaDex (OTC: CDXC), a natural products company, has gotten the attention of at least one world-class investor. Dr. Phillip Frost known for his sale of drug maker IVAX to TEVA (NYSE: TEVA) for $7.6 billion in 2005 has been accumulating shares of ChromaDex according to a news story released this afternoon. In June, Frost added to his 19% stake by purchasing an additional 600,000 shares.  Frost’s latest buy of ChromaDex came at price of $.065. Apparently Frost is not the only insider doing some buying. In the last 12 months, insiders have registered 29 buys to only one sale.

Coincidentally, ChromaDex shares have climbed over 20% since the opening last Thursday when they traded for $0.65. The stock ended today at a price of $0.79 on volume of 1.4 million shares, which dwarfs the average daily volume over the last three months of 248,000.  Shares of ChromaDex started the morning trading for $0.77. Both the high ($0.82) and the low ($0.751) were reached in the first 30 minutes of trading in the new week. The stock spent the rest of the day drifting before closing with a 6.8% gain.

One year ago, ChromaDex stock established its 52-week high at a $1.84. Since March, share prices have bounced between an annual low of $0.44 and $0.75. One thing traders will contemplate tonight is whether the stock has finally started to shine after four months in the doldrums.

The Irvine, California company supplies ingredients and phytochemical products and services to the dietary supplemental, food and beverage, cosmetic, and pharmaceutical industries. One product in the pipeline attracting excitement is a niacin supplement that could rival Niaspin produced byAbbot Laboratories (NYSE: ABT) . For the quarter ending in March 31, 2012, ChromaDex reported revenues of $7.3 million and a net loss per share of 15 cents.

Headlines and commentary have been plentiful for ChromaDex over the last month. The following is a sample of some stories:

  • July 9, 2012: Redchip Companies released an updated research report on ChromaDex.
  • June 15, 2012: An article appearing on Seeking Alpha concerning obesity mentioned ChromaDex.
  • June 12, 2012: Seeking Alpha mentioned the company as an undervalued stock play.

Redchip Companies has been the only recent promoter of the stock. On June 13, 2012, Redchip emailed a notice about the ChromaDex announcement concerning clinical data that showed pTeroPure is safe for human consumption. Redchip receives no compensation for its promotions

ActionStockPicks tweeted about ChromaDex licensing exclusive patent rights for Nicotinamide Riboside. Redchip Companies chirped about a $1.80 price target for the stock.

ChromaDex and its stock have certainly caught the eye of traders and a pharmaceutical guru. The question in the coming days and weeks is whether all the chatter and headlines are enough to propel the stock further. The company is playing in water with some big fish such as Abbot Laboratories and Pfizer (NYSE: PFE). Traders may ask if this little fish can make a splash in a big ocean.

Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email ([email protected]) or his Google+ page (https://plus.google.com/103338576216002376250).



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