Originally Posted by Private Trader Nov. 15, 2009(edit)
Originally posted on Seeking Alpha November 15, 2009:Write Reply
Buy Shares of Imaging3 in Anticipation of Future FDA Approval
Nov. 15, 2009 4:45 AM ET | 36 comments | About: IMGG
I'm not selling Imaging3 (OTC:IMGG) so quickly this time.
I bought into IMGG again on Friday at approximately 1.44/share. As posted on this site, I have bought in and sold
a few times this year (and originally researched / bought the company several years ago when it was truly a penny
stock). When I first bought into it, I felt nervous because I usually do not buy penny stocks due to their
vulnerability to manipulation etc. If you review my instablog, though, you can see that I actually visited the
company unannounced and did my due diligence.
I had sold IMGG at around .96, thinking it would remain around there for a few weeks. Instead, it shot up to
1.22, by looking at the volume (which at over 3M is WAY higher than usually used to be), I highly doubt this
stock will retest $1 anytime soon. Basically, the cat is out of the bag, and people are beginning to recognize
that the Dominion is likely to change the imaging device market for the near future.
I guess it took so long to get here that now I cannot believe how quickly things are happening. I wish I had kept
all my stock longer. However, I have reinvested most (or perhaps more) of my profits into this stock. Foolish?
Maybe, but maybe I was too slow to realize that IMGG's product is finally getting the recognition it deserves.
Imagine if you are in hospital and need an x-ray: do you want the x-ray with a higher level of radiation or a
lower level? While sometimes the higher level might be needed, generally the Dominion's lower level will make it
worth asking your doctor for it, if your doctor or hospital, for legal reasons, does not already insist that you
start with a low dose of radiation. I mean why use an older x-ray machine that doesn't use real time AND
increases your chances of cancer?
Anyway, when I did the numbers on 11/12/09, Yahoo said there were 263.36M shares outstanding. Per the CEO's
comments, this a $16B dollar industry that he believes his company can capture at least 5% of (i.e. 800M) in 2
years and even 10% in 4 years (per investorshub.com comments). This is what leads people such as myself and
Thisisit to believe there is still value in this stock. Unfortunately for me, everyone else is seeing the value
too, and thus the price has rocketed up. I don't have enough expertise to measure the target price more than to
say that $3 - $5 sounds fair and might even be conservative.
If I had time to day-trade this I might, but for those of you who are looking for buying opportunities, these are
the following pivotal events:
RSNA (a radiology show full of doctors / investors) is coming up: In the past IMGG has gotten a boost from this
event, and then the price has fallen...since FDA approval could happen anytime, I don't think the price will be
likely to fall much, but if so, it's a buying opportunity.
FDA approval: Certainly some investors will be so overjoyed they will sell and the price will jump perhaps as
high as $5 and then go lower, perhaps even below $3. Again, this volatility could present a buying opportunity.
Production Deal / Sales of the Dominion: This company has the ability and warehouse space to manufacture the unit
itself. Personally I wish the company would do so, because that would generate a long term cash flow and perhaps
even dividends, etc.
License Agreement or Buy Out: It's my understanding that IMGG has already turned down some small pre-FDA approval
offers. If the CEO thought this was not going to be approved, he could have sold or even declared bankruptcy etc.
by now. Since there are many uses for this technology (e.g. - airport screening device, or military hospital use)
AND software updates might provide additional revenue, in my opinion it seems entirely possible that a buyout
offer of $5-$7/share could occur. Even if the FDA approves the deal (which seems likely), and a buyout brings
"only" $3-$5/share instead of $5-7/share, that's twice the current price of this stock so this time I'm holding
and willing to wait for FDA approval even if it takes another year or so.
Disclosure: Long IMGG.OB.