EFFTEC INTL INC COM STK USD0.01 (OTCMKTS:EFFI) Looks Like A Nice Momentum Play

Between early October and last week, EFFTEC INTL INC COM STK USD0.01 (OTCMKTS:EFFI) gained more than 700%. The company rode high into November on traded share counts that numbered the tens of millions, but over the last week or so, it has collapsed 300%, and currently trades for a market cap of just $1.4 million.There may be potential for near term growth, however, and we've got the stock on our radar going forward.Here's why.First, for those not familiar with the company (and there's probably plenty of people that fall into that category) let's take a quick look at what it does.Efftec International, Inc is essentially just a holding company that acquires brands and established operations, with the goal of bringing the acquisitions together in some sort of – and to steal a phrase from the company's bio here – synergistic fashion.It's core operations, and its only real activity until recently, derived from a brand and subsidiary called Red Light Bakers, which supplies products for grow lamps and nutrient packages to the leafy plant (read: cannabis) growth space.Bakers is the lead sub, but there are a number of brands under which the Bakers sub promotes its products, and these include Future Farms, XE Lighting, Budz Grow Shades, Gro Shedz personal grow systems as well as a few other individually branded products that are not yet on shelves, but are reportedly currently in development.Now, earlier in the year, the company took a hit on the back of falling behind on its financial reporting. This basically kicked off a couple of quarters of uncertainty, and volume was nonexistent during the period. Early August, however, this issue resolved, and market interest picked up. Especially, and as we've said so many times over the last week or so, in light of the then-upcoming, and now just-passed legalization ballots.Between then and now, the company has given us a number of positive updates as part of a strong news stream, and this served to lay the foundations for the gains mentioned in the introduction to this piece. Early October, Efftec reported that its Bakers subsidiary had logged quarterly revenues (third quarter) of a little over $141K. For a company that was – then – worth circa half a million dollars, that report was enough to build on the groundwork and kick start some gains.A late October announcement detailed the acquisition of (or at least, the agreement in principle to acquire) acquire HempLife Industries, a rapidly growing distribution, marketing and sales company focused on consumer based hemp products. The latter has associated with it a range of strong brands in the space, and a combination of cash and restricted stock set aside for the acquisition minimized impact on shareholders.As November turned, the company announced what looked to be the first major development associated with the latter acquisition, with a number of purchase orders rooted in one of the HempLife brands (we won't go in to any detail here about what these orders were for, as it's not particularly interesting – readers that want to check it out can do so here). What matters, is that the company had made an acquisition on non-toxic terms, and that this acquisition started bringing in revenues pretty much immediately.Then the company lost a huge portion of its value.Why, we can only imagine is to do with traders taking profits off the table. It's not often a company of any size returns this much in such a short period, and with the future far from certain, and the current hype surrounding the space, booking profits is extremely justifiable.The question is, will markets start to load up again at these levels, and in turn, is there a second wave to take advantage of?We think so, yes.Efftec just reinforced its bullish sales outlook with the suggestion that it expects to at least double top line sales this quarter, fourth quarter, and that further, it expects business will accelerate into early 2017. Further, that it's cash flow positive immediately, and that it will actively seek only traditional bank financing. Growth, without the risk of toxic financing or dilution, is exactly what traders are looking for n this space right now, and Efftec seems to offer it, and offer it cheap.It's not risk free of course, and there's likely an equally large correction waiting to surface after any upside momentum, but timed well, this could be a nice play near term.We will be updating our subscribers as soon as we know more. For the latest updates on EFFI, sign up below!Disclosure: We have no position in EFFI and have not been compensated for this article.