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- What is your RANDOM STOCK?
The stock selected is Sonoma Pharmaceuticals Inc. The stock index is SNOA, listed in NASDAQ.
- Let us do a reality check: Go to various sites, such as Bloomberg, Finance Yahoo, Fortune etc. and look up the qualitative information available related to your RANDOM STOCK. Which sites did you look at?
The sites used were Yahoo Finance, Bloomberg, and Marketwatch.
- What kind of product(s) does the company make? Which site(s) did you find most useful for this information? Please provide a link to the relevant page.
Sonoma pharmaceuticals is a healthcare company engaged in the development of therapies for skin conditions. Sonoma specifically focuses on the identification, development, and sell of therapeutic solutions for chronic skin diseases (“Sonoma Pharmaceuticals Inc”). The company also develops products for eyecare, wound care, and animal health.
I found the most useful information on Yahoo Finance and Bloomberg.
Link: https://www.bloomberg.com/profile/company/SNOA:US
Link: https://finance.yahoo.com/quote/SNOA/
- Who are some of the prominent members of the Board of Directors of the company? Which site(s) did you find most useful for this information? Please provide a link to the relevant page.
Some of the most prominent members of the board are John G McLaughlin “Jerry”, Sharon A Barbari “Surrey”, and Dr Jay Birnbaum. The most useful site for information about the board was Bloomberg.
Link: https://www.bloomberg.com/profile/company/SNOA:US
- Who are some of the prominent shareholders of the company? Which site(s) did you find most useful for this information? Please provide a link to the relevant page.
The most prominent shareholders in the company are USMIX – Extended Market Index Fund, Morgan Stanley, and Advisor Group Holdings Inc. The most useful information about shareholders was found at Yahoo Finance.
Link: https://finance.yahoo.com/news/major-shareholders-sonoma-pharmaceuticals-inc-194753920.html
- What do you observe about the sales trend(s)? Which site(s) did you find most useful for this information? Please provide a link to the relevant page
Sales has been increasing steadily in the last 3 years. From $12.8 M in 2017 to $16.8M and $18.9M in 2018 and 2019 respectively. The most useful information regarding sales came from Yahoo Finance.
Link: https://finance.yahoo.com/quote/SNOA/financials?p=SNOA
- What do you observe about the current and future market(s) for the company’s products? Which site(s) did you find most useful for this information? Please provide a link to the relevant page
Sonoma pharmaceuticals is in the pharmaceuticals industry. Currently, the U.S. pharmaceutical industry is the biggest in the world and is expected to reach $685.45 billion by the year 2023. The U.S. pharmaceutical industry accounts for 40% of the world pharmaceutical industry. The market is rapidly growing and is primarily driven by a growing ageing population and an increase in purchasing power’.
The most useful information regarding the market was found in Yahoo Finance.
Link: https://finance.yahoo.com/news/u-pharmaceuticals-industry-analysis-trends-155618513.html
- Who are the main competitors? Which site(s) did you find most useful for this information? Please provide a link to the relevant page
Sonoma pharmaceutical’s main competitors are organogenesis, Clearside biomedical, Verrica pharmaceuticals, and Aliqua biomedical. The companies are also engaged in the identification and development of therapeutic solutions for chronic ailments (“Sonoma Pharmaceuticals Inc”). For instance, organogenesis is mainly involved in the development of therapies for wound care. Clearside biomedical develops therapies for the restoration preservation of vision.
The most useful site for this information was Marketwatch.
Link: https://www.marketwatch.com/press-release/us-scar-treatment-market-size—covid-19-big-impact-smith-nephew-merz-lumenis-enaltus-sonoma-pharmaceuticals-2020-05-23
- What do you observe about the earnings and profitability trend(s)? Which site(s) did you find most useful for this information? Please provide a link to the relevant page.
Because of increasing sales, the company’s earnings seems to be on an upward trajectory. However, it has been consistently reporting losses. The company had a net loss of $14.3M and $11.8M for 2018 and 2019 respectively (“Sonoma Pharmaceuticals, Inc”). This partly explains why its share price has been on a downward trend. Although revenue is increasing, the cost of financing the increased revenue is very high, which leavs the company at a loss.
The most useful sites for this information was Yahoo Finance
Link: https://finance.yahoo.com/quote/SNOA/financials?p=SNOA
- Are there any other factors that you would like to consider?
Other key factors that I would consider are the debt the cost of operations. This information would give a clear picture of the financial status of the company. In the last few years, the company has been significantly increasing debt. In particular, the company had debt worth $114,000 and $410,000 in 2018 and 2019 respectively (“Sonoma Pharmaceuticals, Inc”). Because there is no significant increase in sales, the company may be using debt ineffectively. The company’s costs have also been rising with only a small increase in sales.
- What is your overall impression about the company and its future prospects based on the above qualitative information?
Overall, the company seems to be in a very promising and strategic industry. The pharmaceutical industry is one of the fastest growing industries in the U.S. Its increasing costs and debt show that the company is heavily investing in its capacity. It’s therefore expected the company may be profitable in the future.
- Would you still invest in this asset? Why?
I would invest in the company for long term returns. The company, through its diverse range of products, is strategically placed to take advantage of the ever-increasing pharmaceutical industry.
Works Cited
“Sonoma Pharmaceuticals Inc”. Bloomberg, https://www.bloomberg.com/profile/company/SNOA:US. Accessed 30 May 2020.
“Sonoma Pharmaceuticals, Inc”. Yahoo Finance, https://finance.yahoo.com/quote/SNOA/financials?p=SNOA. Accessed 30 May 2020.
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