RE:Where are the $0.25 per share ???It’s a microcap. Microcap markets are generally nowhere close to efficient. I’m in 3 other micros that generate lots of profits but are super cheap, 3-5x ev/EBIT.
Microcaps are perceived as risky because they are small. In an undervalued scenario such as this, it’s cheap because of the perceived risk associated to the size. Funny enough, if this was closer to full valuation, a bunch of expert money managers on BNN would probably think it’s less risky all of a sudden and be recommending the stock.
There isn’t enough volume for bigger investors to enter the stock. If they buy aggressively, the price can go up very fast. No manager wants to be the one who pushes up the price. I’ve seen 50 cent micros double in price with a market bid of 10,000 shares. You can’t even buy this stock online. You need to call your broker. So lazy people or people who aren’t professionals won’t go through with it. I think with this one, there are also so many people holding onto the stock because it’s obviousky worth more. But with no volume, nothing happens.
This is how Buffett made so much money early on. He was buying micros and other super cheap companies and was a master of patience. Later on in his early years he started to take these micros over and either liquidated them or forced a buyout.