Every day, investors who watch the TSX and Venture boards are beset with a seldom answered question: “Why on earth did that stock just jump/drop so much?”
Quite often there’s no answer for months, if ever. Insider buys? Information leaks? Big buyers bullying retail? Takeover bids? Pumping? Rampant and unfounded speculation?
We can’t give you a definitive reason why someone buys or sells a stock in large numbers (at least not every time), but we can have an extended look for you, so the Mystery Movers column is all about digging in to see why some companies move like gravity doesn’t apply, while others looking for a lifeline are instead thrown anvils.
Let’s take a look-see.
Urthecast (TSX:T.UR, Stock Forum):
Vancouver-based high flying (literally) HD satellite streaming video platform Urthecast has experienced a $0.19 jump in share price Tuesday, bringing it to $2.19, without any news to speak of.
The stock has jumped some 75% in a month, but hasn’t released any public information since mid-September, when it announced it was
shipping product to Russia.
What has been released around the company is a little
analyst coverage, which points to $19m a year in signed contracts now, with a potential upside of $100m per year in revenue potential in the Earth Observation market. Clarus analyst Eyal Ofir, reportedly, gives the company a $3.00 price target, so further gains may be ahead if Eyal is on the money.
So what does Urthecast do?
According to the company, “For the first time, the world will have access to dynamic, high-resolution video of Earth, for purposes ranging from environmental monitoring to broadcasting. To accomplish this, 1-meter resolution video and 5-meter resolution still imagery of the Earth below the ISS will be captured, streamed, collected, and distributed to UrtheCast’s data partners.”
BNK Petroleum (TSX:T.BKX, Stock Forum):
If you check BNK Petroleum’s charts, they look like those fakey noise meters that appear on a sports stadium video screens as some obnoxious announcer yells at you to “make some noize!”
Sure, there are dips here and there, but taken as a year-long snapshot of the company, it’s been one long rise heading to a ridiculous peak right now.
Today, BNK jumped 8%, rising $0.12 to $1.58, which is up from $0.80 in August – a 97% jump over three months.
So what’s behind the jump?
Pretty simple: Ongoing good news from a seemingly healthy company.
An example,
from five days ago: “The Company's Hartgraves 5-3H Caney well was successfully fracture stimulated in September and, while it is early in the flowback phase, the well has, over the last 4 days, averaged 1,200 barrels of oil equivalent per day (boepd) of which 585 barrels a day is oil. The early production from this well is more constant and twice as good as the best and previously drilled and fracture stimulated Caney well, the Dunn 2-2H.”
Or this,
from August: “The Company recorded a gain of $9.7 million on the sale of the Tishomingo field assets, excluding the Caney and Upper Sycamore formations, and used a portion of the proceeds to pay down its debt from $41 million to $100,000. Offsetting this gain was $3.5 million related to the amortization of deferred financing costs, a pre-payment penalty of $2.5 million and a $2.5 million payment to settle all of our financial commodity contracts. At June 30, 2013, we have cash on hand of over $90 million some of which the Company will use to complete our 2013 drilling program in the Caney and to move forward our exciting European projects once permits are approved.”
Hells bells, that’s some corporate governance right there.
Northern Iron Corporation (TSX:V.NFE, Stock Forum)
You hate to call a company with feasible mining assets a dead pubco walking, but this one has a year or so of news behind it in which they’re trying to find help to get their Chinese interests online, or sell off interests entirely, as money drains and iron prices slump.
Quarterly results in June 2013 point to $1.2m cash left in hand, down from $2m the previous quarter, and the last news release dropped by the firm pointed to the abrupt end of a proposed project sale due to
poor market conditions.
This is one of those Donner Metals-type plays where people are crawling over the bones, hoping to find a little value underneath when liquidation or a low-ball takeover hits and prices jump a few hundred percent to two cents, and there may well be some of that value here.
Iron’s not the most attractive play right now, but it’s worth more than a bag of wet noodles, which may explain why V.NFE trading volume is in the millions each day and not just riding the half cent rail to nothingdom.
Tuesday, shares dropped $0.005 to $0.01. It peaked at $0.30 back in 2011, but has been a downhill run since, but there are still believers out there who think this might be a bargain buy.