Barfresh stock made a little run from around $0.75 to a high of $1.18 and has since collapsed. So will it go back up?
Barfresh Food Group, Inc (OTC: BRFH) has had a rough past few days. The stock that was once holding itself strong over $1 collapsed reaching a low of $0.40 before moving back up quickly to the $0.80 range. Investors are asking themselves “should I sell here or wait for it to move even higher?
That is a difficult question. While it is fairly easy to predict what these heavily promoted stocks will do in the long term to speculate on short term price movement is much harder. BRFH initially moved up due to a online marketing program of the stock and we suspect a new promotional campaign is under way. This could very well drive the stock much higher from current levels in the short term.
UPDATE: Currently trading at just over 50 cents, BRFH was a heavily promoted stock trading at a market valuation of well over $30M While the promotion lasted the stock saw some quick gains but has since dropped significantly exactly as we predicted it would. These promo stocks do not usually end well for investors and I see this one being no exception.
Last week the Company announced repeatedly that its production facility was operation. While this is certainly exciting news the company has no revenues, little assets and a current market capitalization approaching $50M this is probably a big part of the reason why investors responded so badly to last week’s news. The reality is that any stock trading at BRFH current valuation should be much farther along than this. If the stock was going to support this valuation over the long term the Company would have to already be doing millions in revenues which they are certainly not.
Conclusion: This stock could certainly go much higher in the short term but it’s very high risk. We can be confident that over the longer term, once the promotion is over and all the hype is long gone, Barfresh will trade at a fraction of today’s price.
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