The latest promotional email in support of Seven Arts Entertainment, Inc. (NASDAQ:SAPX) describes the company as “the most undervalued” one on the NASDAQ. Does this necessarily mean that SAPX is definitely poised to skyrocket though?
Considering that SAPX closed the latest trading session at $0.1105, down 4.33% from its previous close, the company’s shares are traded at unusually low rates for a NASDAQ-listed stock. However, just because you can now buy SAPX shares at this price does not guarantee a huge price bound to happen today. A quick look at the chart shows that SAPX hit a six-month low just a week ago. Following a minuscule bounce back, it has now headed straight toward new negative records.
Indeed, SAPX could potentially make a breakthrough in the forthcoming session as a third party investor has just contributed $100 thousand to organize a full-blown promotional campaign in favour of the company’s shares. Will this effort prove sufficient to take SAPX to the next level or not? You decide later on.
If we are to believe in the company’s latest financial records, however, we could easily draw the conclusion that SAPX does not have the financial strength needed to ensure a long-term chart growth. In fact, the company closed the fourth calendar quarter of 2011 with a working capital gap of $7.8 million and a net quarterly loss in excess of $1 million. In this respect, it will take quite a while before SAPX goes in the black, which is an essential prerequisite for regaining investors’ trust.
