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Thursday, October 22, 2020

Massive Turnaround on Bemax Inc (OTCMKTS:BMXC)

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Bemax Inc (OTCMKTS:BMXC) is a penny play in the consumer staples sector. The company had been run into the ground as of last Fall. However, as we noted in our last update, the ship seemed to be turning around to some extent. That sentiment is somewhat reinforced by reports, such as the company’s recent announcement that it has received an $1.1 million purchase order for the supply of its private-label Disposable Baby Diaper from an existing client, a major distributor of the Disposable Diaper in the emerging South and East African markets.

According to their latest release, this new purchase order resulting from the long-term supplier agreement filed on November 16, 2015 is the first tranche of purchase order in 2017, with Bethel Imports paying for each consignment before shipment by Bemax. Apparently, Bemax expects to complete shipment of this order in Q4 2016, which set the company on track to meet its projected revenue for the current fiscal year. Since we last covered the name, the stock has moved 127% higher.

Bemax Inc (OTCMKTS:BMXC) trumpets itself as a company that engages in the distribution of disposable baby diapers to distributors and wholesalers in Europe and South, East, and West Africa. The company was founded in 2012 and is based in Dallas, Georgia.

According to company materials, “Bemax Inc., is a United States company actively pursuing opportunities in the rapidly growing global Consumer Staples and Household Products Industries. Bemax markets and distributes household products of companies positioned to make a significant impact within the consumer staples market.

“We are into a lucrative market in a growing country. The current population fertility rate increased presents an opportunity for Bemax Inc. to enter and penetrate the disposable baby diaper market. Bemax Inc. is poised to take advantage of this growth rate and minimal local competition, with a dedicated and experienced staff, excellent order procurement, and effective management and marketing. The initial intention will be to distribute disposable baby diaper to wholesalers, and local market retailers throughout South Africa

“We realize the fact that for us to prosper in this relatively untapped market, there is need to be flexible and responsive, to delight our customers by providing them with what they want, when they want it and in the exact quantity. Our primary goal will be to establish and strengthen our existence in the market, which will be bestowed by the business environment in which we function.

“Ultimately the attractiveness of our venture lies with the fact that customers will choose our products above those of competitors because of the relatively lower prices as well as their high quality. Hence Bemax Inc. ongoing initiatives will be to drive sales, market share and productivity so as to provide additional impetus towards attainment of the corporate goals and objectives.”

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Traders will note nearly 400% during the past month in terms of shareholder gains in the stock, a bounce that has taken root amid largely bearish action over the larger time frame. Market participants may want to pay attention to this stock. BMXC has evidenced sudden upward volatility on many prior occasions. In addition, the stock has registered increased average transaction volume recently, with the past month seeing just shy of 180% beyond its prior sustained average level.

Management has continued to voice a positive sentiment as encouraging signals roll in.

“We continue to commit to our growth and marketing strategies in the emerging markets through competitive pricing, quality products, and lower overhead costs,” said Taiwo Aimasiko, CEO of Bemax Inc. “This demonstrates commitment to our strategic plan to enhance and sustain shareholders’ value and confidence in 2017 and beyond. The size of this purchase order clearly reaffirms the quality of our private-labels and eliminate the need for financing.”

Currently trading at a market capitalization of $15.5M, BMXC has virtually no cash on the books, which compares with about $346K in total current liabilities. One should also note that debt has been growing over recent quarters. BMXC is pulling in trailing 12-month revenues of $589K. However, the company is seeing declines on the top line on a quarterly y/y basis, with revenues falling at -64.7%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. For continuing coverage on shares of $BMXC stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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