The first day of coverage on UCMT yielded no big surprise. I thought this one would be hard to buy, and I was right.
After all, there are only 5 million shares I&O- the lowest number of any company I follow, and the vast majority of those shares are probably held fairly tightly. After all, the growth rate is extraordinary, the portfolio has some huge upside, and the company pays free trading shares of its portfolio company as dividends. Not much reason to sell.
The stock opened a little too strong- the first print was at $1.78 followed by $1.95. Then it settled back into the $1.75 to $1.80 range for the first 1/2 hour.
Here’s a look at the chart:
In the case of UCMT, I’m not terribly worried that today’s volume surge will be met with any sort of significant pullback. After all, the stock was $4 last summer, and north of $2.50 last October.
It has been many months, and anyone who wanted to sell has had plenty of time to do so. The other side of the coin- sometimes the new found volume and price appreciation brings some formerly inactive sellers out of the woodwork.
Here’s what happens- they don’t realize it’s a new day for the trading activity in the stock. They go “whew” and sell because they hadn’t been able to for months. Next thing you know- the stock turns around and heads back up and they go “what was I thinking?”.
My instincts tell me this stock is probably not going to give much ground from the roughly $1.80 level. It could have come back to fill the gap, but it didn’t. It simply fell back a little, and off we go.
My bet is the next volume surge takes the stock north of $2.
Look for lots of activity in from the company, and a much improved audience and shareholder base going forward.
I believe it is ok to accumulate this one in the $1.80 range. For now, your SSL is $1.50.
Comments and questions are welcome.
What is going on with this stock? No volume
Editor: Same thing other folks pointed out to me when NIHK was trading at $.07 a couple of months ago and no one wanted it. That’s the time to keep accumulating. When the volume comes, you can be a seller just like I’m suggesting with NIHK right now.
What happened with the drop to 1.65 today?
Editor: Not concerned.
What is going on with the drop to 1.65 then the rise to 1.75 and drop back to 1.70? Any thoughts?
Editor: Not really. Not trading enough volume right now for concern.
What would it take to add more shares on the market.
Editor: I don’t know- perhaps a private placement investor. It doesn’t need more shares, just more buyers for now.
Your SSL is 1.50 and I am in at 1.66. Was thinking of another partial if it stays at present levels or drops more. I am looking more to longer term, 4-5 years, would this SSL still apply?
Editor: If you are a long term investor, then no, not really. If you want to accumulate it over the next 4 to 5 years, I would accumulate it like accumulating a mutual fund through dollar cost averaging. You get a fixed dollar amount every month, then you are buying more when it is lower.
Any alarm bells for the dip in price to $1.40? Also, how often does this company spin off stock to shareholders? If it seems like it will happen soon then I’ll gladly sit on my $1.71 entry and accumulate.
Editor: A couple of times a year. Since there is no volume, the pullback does not bother me at all. A buying opportunity. Pick up some more.
There must be something that some folks know that the rest of us don’t. Any clue? We’re down sharply, again.
Paul
Editor: No, there’s nothing going on aside from the stock some folks want to sell because this stock has never really traded.
Any thoughts now on UCMT at 1.18-1.19?
I am sitting on a heavy position at 1.77 1/2.
Regards,
Michael
Editor: It is below my SSL now, so if it doesn’t start behaving a little better soon, it will be time to take your loss and move on or decide you want to be long term.
Nice move by GSAC last couple of days.
Part of UCMT portfolio
Editor: Thanks for pointing that out. I love this one.
What do you think of the drop in TTNUF ?
(I Cant find a blog for TTNUF, sorry had to post it here,,, )
Editor: There’s nothing to report right now. It’s below the SSL, and looking very weak. If you own this one, you just have to hang in there and wait for the company to turn around.
Will they spin out any stocks soon?
Editor: I believe they will later this year.
They have less than 1k cash on their balance sheet, let their operating expenses build up massively in debt, and plan to increase revenue by selling their stock as opposed to real business activity. Time to take the loss and move on now that we are at 1.10? I don’t see how this company can be around much longer in the future at this rate.
Editor: You can sell it if you want, but the company has no cash issues as they can raise it anytime they want in a heartbeat. They keep adding securities to their portfolio for services, and can also sell anytime they want if they need to raise cash. It is very thinly traded, so it could go up or down dramatically on very little volume. However, some day I believe investors will catch on. My SSL on this one was $1.35, so if you didn’t sell then you made the decision to be long term. If you don’t want to be long term, go ahead and sell it now. However, that is the purpose of the SSLs- that’s the threshold where you have to decide.
OK. So now its below 1.10. Where are the buyers?
Michael
Editor: No where to be found today. The company will give investors a reason to buy before too long. If you are still in below the SSL, you are a long term investor, so it doesn’t matter.
What is with the ping pong effect on this stock? For weeks now, it’s been jumping, then plunging. The PPS seems to move in large blocks, daily, but with no news either way! Hear anything new that might stabilize, or better yet, improve the PPS?
Michael McDade
Editor: The stock is simply not trading. However, if you decided to hold it below the SSL, that means you are prepared to be a longer term investor. For now, the stock is dead quiet. However, just a little volume should move it back up. The company needs to become a bit more vocal. I would just hang in there- it will probably rebound nicely on a few thousand shares of volume.
For the long term investors, what is the current situation on UCMT – a little detail would be apprciated if possible.
Also you mentioned you would put a blog out last weet on BTYH, which I didn’t notice.
Thank you,
M
Editor: not much change at either of the ideas you mention. The shares of UCMT keep trading poorly, but on very weak volume. They need to do something to get things rolling in the right direction.
Actually I was hoping for a more detailed analysis of UCMT. Trading a little past 2 pm 35,500 shares *more than a few thousand* and dropping 21%.
Any idea or comment or better yet some detailed feedback on this stock would be highly appreciated.
Thanks
M.
Editor: I know I owe everyone a more comprehensive version of what is going on. Travelling today and for the next few days. However, I will speak with management before too long and give everyone a feel for the company’s future. 35,000 shares is pretty miniscule, but relatively speaking this is a fair amount.
It’s down 20% today on heavy volume. Any news? Buy more at $.60?
Editor: At some point in here, this one is going to be a screaming buy. For the time being, I would just hold your nose and wait. We’ll pick it up again when the sellers have all disappeared.