Good Morning!
A lot of stocks would marvel at a 44% win especially when the market is selling off, but it’s really JUST ANOTHER DAY for the one I’m profiling here.
Ovation Music & Studios Inc. (OVMS) earned that 44% close yesterday on fairly robust volume. No news, no catalyst: just another day!
Do the math and OVMS has hopped an AVERAGE of 11% a day over the last 3 months, from the opening bell to the intraday top.
That number includes its share of zero days and reversals, but on the upside, the really good days score 45% to 70%.
Count the big candlesticks for yourself:
The channel up there looks narrow in the grand scheme of things, but that half penny still represents close to 60% worth of percentage points.
That band makes room for some WIDE action without needing to crack the top or dive below the bottom! And even a DIVOT can make us happy.
Here above a lofty $0.01, we’re close to the top, so we could see OVMS test the ceiling today... especially if the market gets any lift whatsoever.
You know I love a breakout! And once again, the float here is narrow enough to accelerate any move we see this morning.
There are barely 10 million OVMS shares in the open float, which at 1 penny apiece means barely $100,000 in play, day to day!
Granted the right slice of that action still multiplies into a healthy dollar score when OVMS swings high, but the narrowness explains the volatility.
Tiny stock, tiny float = huge and accelerated price moves. It’s basic market math, and we’re lucky to have OVMS to demonstrate it.
So what does this tiny company do? OVMS runs a Palm Beach music school, complete with “school of rock” style summer camp.
Business has been good enough to support a second location, this one opening up near Nashville last month to capture the country music crowd.
OVMS is thinking of opening other schools in hot markets: Atlanta, DC, the NYC suburbs. We’re clearly embarking on a big expansion ramp here!
The numbers last quarter show 15% growth on the bottom line thanks to extensive marketing. OVMS may be artists, but they like the mighty dollar!
It takes money to make money. OVMS spends on commercials and the pay-to-play students roll in the door!
Cut out the ads and focus on the current student body, OVMS might actually generate positive EPS. They’re less than $100,000 from it now!
When a tiny company like this that generates even a penny of p-p-rofit, the math suddenly ramps with LIGHTNING speed.
Here and now, of course, the stock is moving at a similar pace. I can’t wait to see what OVMS brings us today. Now let’s move!
Sincerely,
Michael Reef
yourstockguy@gmail.com
