Monday, 20 May 2013 09:20 AM
Chromadex Corporation (OTC Markets: CDXC) Director Michael Brauser purchased 25,000 shares of common stock on the open market on May 13th, according to a Form 4 filing with the SEC. The purchase, at a price of $0.662 per share, brought the insider’s total ownership stake to 4,519,926 shares owned directly by Mr. Brauser.
Michael Brauser, 57, has served as Co-Chairman of the Board since October 2011 and served on the Compensation Committee from May 2010 to March 2011. Mr. Brauser has been the manager of, and investor with, Marlin Capital Partners LLC, a private investment company, since 2003. From 1999 to 2002, he served as President and Chief Executive Officer of Naviant Inc. (eDirect Inc.), an Internet marketing company. He was also the founder of Seisant Inc. (eData.com Inc.). Mr. Brauser also served as Co-Chairman of the Board of Directors of InterCLICK Inc. – now a part of Yahoo Inc. (NASDAQ: YHOO), from August 2007 to December 2011. With his past experience as Co-Chairman of the Board of Directors at InterCLICK and as manager of an investment company, he brings extensive business and management expertise to the board.
Rapidly Developing Pipeline
Mr. Brauser’s insider purchase comes shortly after Chromadex announced the first human clinical study for its new caffeine ingredient technology, PURENERGY™. At a time when the FDA is calling caffeinated products “very disturbing to us”, the company’s patented co-crystal ingredient reduces the total amount of caffeine needed to achieve the same effect. Moreover, animal studies have shown that the substance has a half-life 6 to 8 times longer than caffeine.
The company has also launched ProC3G™, a natural black rice extract containing 35% cyaniding-3-glucoside; NutraGAC™, a Gac fruit powder; pteroberry™, a natural pterostilbene and organic berry blend; and is in the process of developing Nicotinamide Riboside (“NR”), a novel next-generation B-vitamin. All of these products are based on extensive scientific research and backed by intellectual property rights obtained cost-effectively at a very early stage.
These technologies provide a solid competitive edge in the nutritional supplements industry, alongside competitors like Neptune Technologies & Bioresources (NASDAQ: NEPT) and NTBY Inc. (NYSE: NTY), among others.
Insider Buying Indicator
Insiders have access to proprietary information about public companies, which makes following their buying and selling a natural activity for investors. For example, a Director or CEO may decide to purchase stock even after a major agreement is signed due to a belief in the long-term prospects of the agreement. Investors can follow these transactions by looking at Form 4 filings made with the SEC, via websites like SECFilings.com, which offer free real-time alerts.
Several academic studies have also confirmed that this buying is a valuable predictive indicator of future price movement. For example, Harvard’s Leslie Jeng and Richard Zeckhauser and Yale’s Andrew Metrick calculated insiders’ actual returns for purchases and sales without any screening criteria that are commonly used among other researchers. In raw returns, these researchers found that insider buying beat the average market return by 11.2% per year.
Looking Ahead
Chromadex Corporation (OTC Markets: CDXC) represents an interesting investment opportunity at its current levels. With a market capitalization of just $61 million, the company trades at a fraction of its potential valuation, while its unique business model appears capable of generating significant shareholder value over the long-term. Investors interested in learning more can visit the company’s website at www.chromadex.com.Savvy investors can sign-up for free at www.secfilings.com to receive free real-time SEC filings alerts for not only Form 4 filings but any other SEC filing type for any public company.
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