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| | | To Chase or Not to Chase
The mandate for our blog is to primarily cover small-cap and microcap stocks. Still, when there is water cooler talk about a stock that jumps almost 300% in one day, we will talk about it, small cap or not. By the way, we are not talking about a stock that was 6 cents a share but around $100 - prior to its rise.
Yesterday, Intercept Pharmaceuticals, Inc. (NASDAQ - ICPT - $275.40) had some amazing research and development news and the stock traded several million shares. I do not recall if I have ever seen a stock with such a high price leap as much as this one did. Moreover, there are some people that think it can move higher!
Look, I am not about to recommend or even profile a stock that is up more than $200 in share price in one day unless the company discovered a cure for all cancers, world hunger and cheating politicians. But when rational investors are wondering if a stock up $200 is undervalued, it may be time to see if you have the makeup of a trader that routinely chases the stock du jour.
To read more click here >> or visit http://www.thestockjunction.com
This Stock is Too Cheap
Today's blog is a great teaching moment. In my experience, I only come across stocks such as the one featured today three or four times a year. Most management teams of small-cap and microcap companies tend to do a relatively poor job of investor relations but sometimes perform well in promotion.
Promotion in this case is the design of a message or theme around the company that helps with the branding so that customers and investors alike can relate to the company, its offerings, objectives, etc. In the absence of successful investor relations and promotional efforts, a stock will flounder and trade well below its true value, even if it operates in a high-growth industry and is performing well operationally. This contradiction results in a unique opportunity to buy a stock for far less than its intrinsic value and ride it to new highs as it performs financially and via word of mouth.
To read more click here >> or visit http://www.thestockjunction.com
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