Invest with Clarity or How To Avoid Investments Like Buying BGLC Stocks?

We regularly receive questions from our users and visitors about the way we use the Eyestock Rating, as well as verifying stock valuations within actual portfolios using our analytics platform. Since we had to sort out truly unique queries, the idea was born to write this methodological article to answer most of the questions at once.

Why should you avoid buying equities like CLNV stock?
What was wrong with SHMP stock?
How could you dodge a collapsing BGLC price even if you had bought it already?

Ever heard of Clean Vision Corp (OTC: CLNV) shares? Let’s dive in.
While the company’s mission of addressing the plastic waste problem through recycling and creating marketable byproducts is crucial and clear, Clean Vision is a company without revenue and stable reporting, and it’s also a micro-cap. When dealing with a company`s shares with a market capitalization below $1 billion, it’s important to acknowledge the inherent risk similar to venture capital investments. At Eyestock, we advocate for limited investments in micro-cap companies, particularly for investors with a moderate risk profile. With numerous investment opportunities available in established businesses, why take unnecessary risks?

Going back to CLNV. Its shares are currently valued at practically nothing, sitting at $0.024 as of April 19th, after once being priced over $1.However, it’s important to note that we’ve never been able to derive a rating from our model for various reasons. If you see a picture like this, then there are good reasons to avoid such an investment.

Another company that has caught our attention is NaturalShrimp Inc., a biotech firm based in Dallas. They specialize in developing and producing gourmet-grade shrimp without using antibiotics, probiotics, or toxic chemicals. We’ve previously mentioned the biotech industry in our article on the healthcare sector, highlighting it as one of the riskiest segments for investment. Furthermore, we’re once again discussing micro company with market cap measured in millions. The Eyestock Rating of SHMP has never been above 0! You can check it by diving into the company`s page on Eyestock.

NaturalShrimp has only had 1 profitable quarter in history, and that was for $15 million only. While such a story can take off, we’re here for analysis and investment, not fortune-telling. Our users were cautioned about the exceedingly high risks associated with this business and wisely avoided potential losses.

The case of BioNexus Gene Lab Corp (BGLC on Nasdaq) is more interesting to analyze and discuss. As of December 31, 2020, this Malaysian company, which focuses on the application of functional genomics to enable diagnosis and personalized health management, had a rating of 101%. This surpasses our threshold for an ideal investment by 1 point, making it a particularly noteworthy opportunity to explore. 

However, again, the company’s annual revenue was only $18.6 million, and the entire enterprise value did not exceed $300 million! Back in 2021, BGLC shares were trading in the range of $25-30 on Nasdaq Exchange. But then the rating began to rapidly decline amid a deterioration in all financial indicators in the reporting and the metrics we calculated. At the beginning of 2022, the Eyestock Rating was already only 24% of the reference 100, and then completely fell to 6%. Interestingly, at that time, the shares were still trading at around $15. This loss in market capitalization, totaling approximately 95%, the failure to generate profits and negative returns, underscores the importance of our rating system in alerting investors to such potential pitfalls and helping them avoid such significant losses.

What do all these lesser-known companies have in common? Firstly, micro caps should immediately put investors on high alert. Secondly, the lack of a rating due to insufficient data should dissuade from investing. And finally, a low or even negative rating may indicate that continuing to hold shares of such companies is not the best idea, even if you’ve already invested in them. Ultimately, our goal is to help you safeguard your capital.

Here’s another compelling example that perfectly demonstrates the effectiveness of the Eyestock Rating in conjunction with the valuation, but this time focusing on companies with a market cap reaching $80 billion.

Let’s delve into the story of Illumina (trading as ILMN on the Nasdaq Exchange), a prominent player in the Life Sciences Tools industry, which became a significant investment for the Eyestock team during the COVID-19 pandemic. Monitoring the stock since 2019, we noted its rating surpassing 100% by year-end. As we strategized our investment and determined the optimal portfolio weight and entry point, there was a market collapse triggered by the developing pandemic.

During this tumultuous period, the stock plummeted to the green line on our charts, indicating an unprecedented undervaluation of the company’s net income.

Having bought the stock at about $230 per share, we anticipated our profit, which materialized swiftly. Within less than a year, the Eyestock Rating fell to 84%, down from the initial 105% at the time of purchase, with shares trading above the red line—a stark reversal in the company’s perceived value from our investment’s inception. Exiting at around $440 per share, we locked in a 90% profit even though top Wall Street analysts predicted a bright future for the company. However, the most significant takeaway lies in the subsequent decline of the company’s rating to -12%, with shares now priced at only $117. This outcome serves as a cautionary tale—one that we diligently warned against.

These stories underscore the importance of our tools in avoiding risky investments. At Eyestock, we provide investors with company ratings, and valuations, along with comprehensive analytics on 50 indicators of the issuing company. Of course, In some cases, a company with a rating above 100% fell sharply, or a small company on which we did not bet at all experienced a strong rise in shares. But these are exceptions.

Our rigorous quantitative research helps us pursue our strategy with discipline because we know that numbers don’t lie. The annual return of the S&P 500 index over the past 5 years was 13.7%. Equities with a High (>100%) Eyestock Rating on average had a return of 16.7%, while companies with a Low (<50%) Eyestock Rating only had returns of 7%! These are pure ratting results if you don’t use any valuation tools and insights.

We invite you to test our methodology for yourself here.

Invest with Clarity: Eyestock’s Unbiased Ratings Guide Your Investments.