OLGR: Hydraulics co. stock up 70 pct on "day-trader frenzy"
Fri Jun 17, 2005 03:52 PM ET
NEW YORK, June 17 (Reuters) - Stock in a small hydraulics company, Oilgear Co. (OLGR.O: Quote, Profile, Research) , rocketed over 70 percent for no apparent reason on Friday, leaving its chief executive officer blaming "day-trader frenzy."
"We think we know the reason," David Zuege told Reuters by telephone from company headquarters in Milwaukee. "A reliable source in the market told us the sudden spike was the latest move in the day-trader frenzy to pick up small-cap energy firms.
"But we're not even in the energy business, we make hydraulic equipment and have done for 85 years," he said.
Stock in Oilgear, which manufactures hydraulic components and electronic controls for the primary metals, auto, chemical and petroleum industries, rose all day on Nasdaq after opening at $10.55. In late afternoon trading, the shares were selling for $16.67, which was $6.91 or up 70.8 percent.
"Last quarter was good and business is good, but nothing for any rational analyst to say would double the price," said Zuege. Oilgear's sales were $26 million in the first quarter.
"Someone paid $23 for our shares, that's crazy," he said, adding that there were two previous sudden jumps this year when the stock soared unusually high before dropping back to the original level.
"The previous two were out of the blue. The stock went up and there was no fundamental or economic reason for it," said Zuege. "Of course, I'm always happy to see the stock go up."
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