Smoak CapitalThe recent buying by Smoak Capital has pushed Hammond Manufacturing's share price closer to the $12 level I predicted after the Q3 results were publlished. This price level is sort of a compromise between the sorry price history of the stock and its fundamental value, which is slowly being recognized. Over time, the price history will be less of a factor and the share price will be driven mostly by value fundamentals.
I think the recent pop is just the beginning though. First off, Smoak needs to buy a lot more shares to establish a meaningful stake. The technicians, day traders, and other fly-by-night speculators - few though they were - have already sold into this rally. What's left is long-term value investors like me who see exactly what Smoak sees in the company. To motivate us to at least trim our positions, Smoak will have to offer something north of $12 a share.
And Smoak is not the only player with a hat in the ring, so this may not take as long as it otherwise would to play out.
Baby Bunny