Fresh Healthy Vending International, Inc. (OTCMKTS:VEND) Looks at $4 After Fresh PR

Fresh Healthy Vending International, Inc. (OTCMKTS:VEND) has been successful in combining a paper mailer with the general appeal of its company – and so despite the lag in the campaign, the price has not crashed, but continued upward. After reposting its financial results, VEND added more than 12% to stand at $3.77, on buying volumes of $3.83 million.

The revenues of VEND exploded, to $2.2 million from a mere $10,000 in the June quarter of 2013. But the expenses also rose, thus leaving VEND with $242,000 net loss, compared to $23,000 in the summer. Now, it is still up to VEND to prove that its business will expand to profitability.

Now, VEND is near its peak at $4 and will have to show if the coming weekend won’t trigger selling. VEND has on its side the Entrepreneur Magazine list, where it merited a mention in the top 500 fastest growing franchising companies in the USA and Canada.

Investors’ forums remain rather inactive, and little is made of the paid paper mailer that seems to be spreading in a second wave. Technical indicators and buying the lows seem to be another driving force.

While VEND is promising, the next quarters will have to show if all the machines sold will bring in revenues to match the expenses. But this event would lag the movement of the stock price, which fell by 50% in a week the first time that the email campaign slowed down.

In those cases where the company was not solid enough, a paper mailer turned into disaster. This was the story of Lot 78, Inc. (OTCMKTS:LOTE), which grew from 50 cents to $23, made a split and from a price of $5 plunged to its current position at 6 cents. LOTE tried a ran in January after positive business news on a new credit line, but went on to wipe out 40% of the newly gained value.

The Alkaline Water Co, Inc. (OTCBB:WTER) had a similar fate. For a while, the bottling company gave signs it could take off in 2014, with a new production facility. But the long sideways drift tested the patience of investors, and WTER gradually lowered its range, from around 30 cents toward 20 cents.

In the case of VEND, the high price is no guarantee of stability, and while there are enough boosting factors, in the past the company has shown it can retrace the gains.