Vaping Brand mCig Announces Strong Results for Fiscal 2016

Stocks moved higher after the release of the closely watched nonfarm payrolls data. Figures released this morning by the U.S. Department of Labor showed that the key numbers came in below analysts’ consensus expectations. The reason the data is followed so closely is that it could determine whether the U.S. Federal Reserve will raise interest rates in 2016.

Last week, Fed Chair Janet Yellen hinted at a possible rate hike in 2016, citing continued improvement in the labor market. With labor market data now widely viewed as soft, the rhetoric around a September rate hike has eased.

After all, rate hikes are generally negative for equities, so investors were pleased to see the broader market in rebound mode. Keep in mind that stock valuations are already at historically elevated levels. Based on fundamentals, current valuations are hard to justify and have been supported mainly by ongoing monetary policy stimulus.

Although trading was stronger today, there were still some stocks that could not seem to find their footing. One such stock is mCig Inc. (OTCQB: MCIG). Based in Beverly Hills, California, mCig markets and sells e-cigarettes, vaporizers, and accessories under the mCig brand. The company manufactures and retails the mCig loose-leaf eCig vaporizer. It also holds an investment in Vapolution Inc., which manufactures and retails home vaporizers such as the Vapolution 2.0.

MCIG stock failed to gain early momentum yesterday after the company announced its financial results for the fiscal year ended April 30, 2016. Revenue for the fiscal year rose 238% to $1,723,241. In fiscal 2015, MCIG reported revenue of $509,957. Gross profit for the fiscal year was $290,773, up 169% from fiscal 2015.

mCig CEO Paul Rosenberg said the company’s recent wave of business growth has made it necessary to communicate more effectively with its shareholder base. Rosenberg also said the company understands the importance of sharing recent developments with shareholders to ensure they have a thorough understanding of its vision and growth opportunities.

The company plans to hold a conference call later this month to discuss these matters. The call will be hosted by mCig’s interim CFO, Mike Hawkins. Hawkins will discuss MCIG’s operations as well as its first-quarter results for the new fiscal year.

Because the strong revenue figures did not translate into gains in yesterday’s close and the stock also traded flat today, the CEO is right to believe that more effective communication with shareholders is needed. In fact, the share price has been in a downtrend since March of this year.

While the news is positive, the response from shareholders has been far from enthusiastic. The CEO will need to identify what is holding back the company’s stock price before MCIG shares can break out of their current downtrend.