Looking for opinions / guesses on what a share price do.
Started a position in the stock LBIX (Leading Brands Inc.), which trades on the NAZ. It's a "fully integrated" beverage company that is transitioning to a beverage-only company (past 3 years). They announced the sale of their hot fill bottling plant in October 2016. The deal closes February 1st, 2017. They haven't announced the sale price. I've done some research and I think it will be at least $5M; $6M if they weren't under duress when they sold it. The company's current market capitalization is about $4.5M.
In a rational world, this stock price should jump to reflect this influx of $5M in cash. What complicates this is revenues have been dropping for several years because of the transition (they bottled other people's products, too) but they've remained kind of break-even. No long-term debt. If they liquidated tomorrow, they're worth more than $4.5M. The big sticking point is the impossibly small float, only 2.8M shares overall and a great deal are held by insiders. As a result, the stock is highly illiquid by Nasdaq standards. If the stock is gonna jump, it's gonna be on retail dollars.
On the positive side of the ledger, the company seems genuinely concerned about the share price. They've bought back 40K+ shares, every year, for at least the past 3. They bought 53K shares last quarter. 53K shares might not sound like much but when their are 2.8M overall, it adds up quickly. Oftentimes, I'll see a bid at $1.52 with 100 shares; then it'll flash with several bids at $1.52 with 1,000's of shares, and then be gone. Almost like someone (the company?) is baiting potential sellers.
I think this is a loser stock with meh products: Happy Water (water with lithium) and bottled air (they really sell bottled air to highly polluted places in the world), as well as a couple other beverages. But I think it has short-term potential. They announce earnings around January 14th-ish. The beverages they sell seem to have momentum. This quarter or the last should have been the nadir of this company.
I'm hoping they announce the sale ($5M in cash coming in) when they announce earnings, which I also hope to be positive - company transition is nearing completion and the trajectory is upward from here. A bully catalyst with a tight float should be profitable, no?
What are you guesses on the stock price appreciation, if any?
