Horizon Lines Inc (OTCMKTS:HRZL) Back Where It Started
OTC-Listed penny stocks are inherently volatile. The chart on the right belongs to Horizon Lines Inc (OTCMKTS:HRZL) and we reckon that it proves the point pretty definitively.
As you can see, a month ago, HRZL was sitting comfortably above the $0.60 per share mark. Then, it dropped down and in a matter of just ten days, it wiped out more than half of its value. Last week, it bounced off the bottom and added 33% while shifting nearly $900 thousand worth of shares, but unfortunately, it caved in under the pressure and after three red sessions it’s back at $0.30.
Not exactly the best performance we’ve ever seen, but we should note that such sudden jumps and dramatic drops are often observed in Pennyland. The thing is, they are more often than not caused by either a paid promotion or a press release. Neither of these seem to be present in HRZL‘s case. The latest filings don’t tell us much either and there aren’t even any rumors that could cause the sudden increase in interest.
Things start to look even more bizarre when you have in mind that HRZL is a relatively solid, operating entity. We read in the SEC filings that they started way back in the 1950’s and the 10-Q covering the period ended March 23 confirms that business is still going strong. Here are the figures found in the report:
- cash: $1.479 million
- current assets: $152 million
- current liabilities: $155 million
- quarterly revenues: $252 million
- quarterly net loss: $26 million
When you compare the financials above with the ones presented by other heavily traded penny stocks, you’ll see that HRZL is indeed one of the more solid ventures on the OTC Markets. That said, the 10-Q is not perfect.
There’s been a 3% jump in revenues year over year, but unfortunately, the net loss has increased by a scary 28%. Having gone through some of the older reports, we can see that consistent profitability has so far been elusive and if the struggles continue, the shareholders’ patience might run thin.
In addition to this, there are quite a lot of warrants outstanding that can be turned into common stock at just $0.01 per share and the Legal Proceedings section of the 10-Q is definitely worth the read.
There is one more thing that could severely affect HRZL‘s performance – the trading volume. Or more precisely, the lack of such.
Investors seem to be quite excited about the opportunities presented by small cap start-up enterprises like Minerco Resources Inc (OTCMKTS:MINE) and Growblox Sciences Inc (OTCMKTS:GBLX). Yet, when they are confronted with HRZL, they don’t seem to care all that much.
And without them, the stock isn’t going anywhere. That’s why, carefully considering the risks and doing your own due diligence is absolutely essential.
