29 May | The Power of the Road Trip
Never underestimate the power of the road trip. No, I’m not talking about gathering up a bunch of buddies and box full of beers and hitting the tarmac (which admittedly can be a heck of a lot of fun), I’m talking about one of my favourite little short term price pushers, the company presentation.
It can be a one off show at a trade fair or if you’re lucky, management can take the whole kit ‘n’ caboodle on the road in an attempt to sell their vision to the big boys with the dough (institutional investors) and stir up a little private investor interest in the process.
There is a cavaet. For there to be any price upside to the process, the company really has to have something to sell. There’s no use hitting the road to inform investors of impending corporate doom.
Which leads me nicely into Range Resources who have been doing their thing without getting too much price love for a while now.
Here’s why we got on board with Range Resources back in January.
Last Tuesday – 22nd May 2012 – Range announced they’d be hitting the road and issued this succinct statement to investors:
Range Resources Limited is pleased to provide an updated Company presentation being presented this week at the ASX Small to Mid Caps Conference in Singapore and Hong Kong. A copy of the presentation is available on the Company’s website.
Now I haven’t had time to pick through the contents of the presentation but here’s all 19 pages of it in all its Technicolor glory. From a news-breaking aspect there should be nothing new in there – if there is they might find themselves in a little bit of regulatory trouble. It’s basically a highlight reel of what’s been happening at an operational level with Range in Puntland, Texas, Trinidad and Georgia.
So with that in mind, it’s the price movement from 22nd May 2012 that sparked my interest. To deal in approximates, Range’s share price went from 6.5 pence to 7.8 pence on the day, a rise of over 16%. Here it is in a graphical format courtesy of our friends at Share Price.
It could be argued that after the week Range (and many an AIM company) has had that a bounce was inevitable, but I think that would be downplaying the power of the presentation. And obviously on Wednesday the price retreated in a fashion becoming all to well known to holders of, well, just about anything on AIM of late.
Now I have to be up front a little at this point. On the same day there was a director dealing; Peter Landau upped his holdings from 13,206,522 shares to 13,956,522 – a purchase of 750,000 shares. Nothing to be sneezed at but in the scheme of things hardly worthy of a 16% price rise when you consider that an average day’s volume is usually quoted in the tens of millions. I could be wrong but I think taking your company to the road and putting your money where you mouth is on the same day makes pretty good business sense.
Anyway as a tool for defining an entry point I don’t think you can afford to ignore the power of the road trip. If you’ve been umming and ahhing over a purchase and a road trip is announced maybe it’s time to take the plunge.
Thanks again for dropping by.
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