Time to start dreaming again, or time to be even more cautious – a very important question when one looks at what Cono Italiano Inc.(OTC:CNOZ) did this Monday. Stock promotions, press releases, financial forum hypes – they all came together to push the stock to a level which was last seen more than half a year ago. 
It was a one-day marvellous run, indeed. Yesterday, almost 19 million shares exchanged hands, making up for a 420% increase in the stock price, the session closing at $0.13 per share. So, the question is – will the run continue? Now, answers like this more often than not lie in the root cause for the trading frenzy that took place. Also, while impulsive reactions might have led to the hype yesterday, now that investors had time to do the necessary due diligence, it all depends on whether Cono can offer the public data that inspires confidence and optimism in people.
Of course, there could be more promotions, but given the past performance of the stock when influenced by paid newsletters, like in February, it is unlikely that they could serve as a major catalyst for the bullish run to continue. Press releases, in terms, are also a controversial point. Indeed, the one from last Friday could be the most important catalyst at hand, regarding the eventual expansion of the company’s products to stores and supermarkets. So important, that the company’s announcement form Friday had to be released again on Monday. But, repeating old news is not an exception for Cono Italiano. For example, the other “breaking news” from Monday was that the company was featured in the Food Network series. What that particular announcement fails to mention, is that Cono Italiano was featured in the Food Network, but way back in time this year. [BANNER]
Nevertheless, the above are more or less subjective sources of information. An objective one that could convince investors that this company is not going strong, is the balance sheet. The most recent one is the 10K form, covering 2010. It was released on April15th and includes the following as of Dec. 31st last year:
- total current assets of $199k;
- $665 in cash;
- total current liabilities of $1,16 million;
- accumulated deficit of $1,7 million;
- sales of $10,9k;
- net loss of $348k;
It is unlikely that most traders had this information in mind yesterday when they rushed to buy Cono stock. Yet, more and more people would take a look at the balance sheet and discover the above data, which is far from optimistic. Of course, these numbers are by no means a sign that the company would fail, or that 2011 would be just as bad. They are, however, a clear sign that caution should be exercised when making an investment decision related to Cono Italiano.
