Truth be told, it's not clear if SK3 Group Inc. (OTCMKTS:SKTO) is best described when compared to a name like Cerner Corporation (NASDAQ:CERN), or to a Gentiva Health Services, Inc. (NASDAQ:GTIV). The company's got elements of both major industries being represented by CERN and GTIV (home health care, and information technology), with the addition of another budding industry thrown into the mix. One thing IS clear though... SKTO shares have decidedly reversed a nasty downtrend, and may now be one of the market's best small cap healthcare speculative trades.
Don't sweat it if you've never heard of SK3 Group. Most investors probably haven't, primarily because the company wasn't doing anything (almost literally) until the first quarter of this year. That's when SKTO posted its first revenue in years, on the heels of more open-minded laws regarding the usage of what the company describes as "alternative care and medicine"... which is the politically correct way of saying "medical marijuana". The company acquired another company called Medical Greens, and within a week had booked more than $30 million worth of management and logistics service contracts. By the end of Q1, SK3 Group Inc. had generated sales of $4.7 million, and logged a top line of $13.43 million for the second quarter of this year.
It would be wrong to lump SK3 Group Inc. into the same group most cannabis, hemp, and marijuana stocks fall into however. Indeed, it was no joke to suggest a comparison to Cerner Corporation and/or Gentiva Health Services; SKTO is run and presented as a company that could stand shoulder to shoulder with that IT company and home health company, respectively.
How so? For starters, SK3 Group has paired its effective launch several months ago with a well-polished publicity effort. An IR firm as well as an auditing firm has been announced, and the company has deliberately sought to build/acquire a cannabis science team, complete with licensed CBD-extraction technology and a dosing-tablet format that sidesteps the high that is often achieved (yet rarely wanted) by cannabinoid users.
In other words, SK3 Group Inc. isn't treating this business like a backyard-hobby. It's treating it like any other medical technology or medical logistics organization, and the results are already showing.
Be that as it may, of most interest to investors right now is the fact that SKTO shares are now embedded in a very trade-worthy uptrend that fell into place earlier in the month.
The chart below tells the tale. Shares were in a decided downtrend through October 9th. On October 10th, the selling stopped and the buying began, and nobody ever looked back. Since then - and only after the second effort - the stock's fought its way above the key 200-day moving average line (green), confirming that this is a bigger-picture effort underway. We've seen a couple high-volume 'up' days in the meantime too, telling us there's plenty of interest and participation in this rally. It's the clear breakout from the downtrend and entry into a new bullish channel telling us all we need to know here, however. That, coupled with the fact that SK3 Group Inc. has a lot of plausible growth in its future, says today's lull is a perfect time to step into a position.
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