Introduction

It is not common for me to be writing on penny stocks like Chasen, but it caught my attention with its spike. I got curious and started looking for more information regarding it and found some interesting facts. Coincidentally, one of our readers dropped us an e-mail and requested for a write-up on Chasen! For starters, Chasen is trading at a price-to-book ratio of 0.2198. The threat of a value-trap is real, but its recent spike from 0.027 to 0.041 gives us some possible indication of interest and revival of the stock.

Strengths

-Nil-

Weaknesses

  1. Poor Net Profit Margins
  2. Outstanding Warrants

Poor Net Profit Margins

While Chasen has a decent gross profit marginĀ of ~20%, this figure does not flow down to the bottom line as we see expenses eroding the net profit margins down to the negative regions. The management is very well aware of …