Stocks discussed: California Resources Corp (NYSE:CRC), Gold Resource Corporation (NYSEMKT:GORO), Intrepid Potash, Inc. (NYSE:IPI).
Stocks mentioned: Barrick Gold Corporation (USA) (NYSE:ABX), Franco Nevada Corp (NYSE:FNV)
California Resources
California Resources Corp (NYSE:CRC) closed out its session on June 3, 2016 at a little under $15 a share. At time of writing, the company trades for just shy of $20 flat – a more than 335 gain across the period. The gains come as a combination of a few different factors, not by way of one particular catalyst. Specifically, a combination of a stock split announcement, a management reshuffle, and a reiteration of some pretty decent financials, all against a backdrop of wider market strength in the commodities sector.
From a technical standpoint, it looks as though there might be more gains to come – albeit taking into account a potential short term pullback. The stock breached its 50 day moving average during the Tuesday session, and remains well down on its 52 week high of $79.7 a share.
One thing to note before risking capital is that California has a very low cash holding – somewhere in the region of $10 million at last count. This isn’t a huge issue right now, as cash flow generally mitigates the loss in cash holding, but it might become one at some point during the next 24 months.
Gold Resource
Gold Resource Corp (NYSEMKT:GORO) kicked off Tuesday’s session at $3.3 a share. At close, the company had gained 7% to trade at $3.6. Why? Again, this one is more attributable to wider market performance than it is anything specific to the company. The gold industry is turning around, fresh off the back of a half-decade long decline. As gold prices rise, the bigger players in the space – Barrick Gold Corporation (USA) (NYSE:ABX), Franco Nevada Corp (NYSE:FNV) etc – are picking up their exploratory efforts, and this is dredging up free capital. With the free flow of capital comes expansion opportunities for the smaller players – namely, in this instance, Gold Resource – can seek expansion.
Looking specifically at this company, Gold Resource announced some pretty decent drilling results, and these will go forward to support its forward financing across the coming twelve months.
Intrepid Potash
Finally, Intrepid Potash, Inc. (NYSE:IPI). Intrepid currently trades for a market capitalization somewhere in the region of $112 million, and is up nearly 5% on its last week’s close, trading for $1.5 a share. The company declined last week on the concurrent decline of three of its primary underlying chemical dealings – nitrogen, phosphorous, and potassium, known collectively in the industry as NPK. These chemicals have gained slightly early this week, and it is these gains that have helped to boost the company’s fortunes.
Looking at the quant side of things, Intrepid holds just ahead of $24 million cash on hand (as of March 31, 2016) and currently trades for a P/S (ttm) of 0.53.
For more industry updates, check out our Daily Biotech Spotlight here.
DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.
