Axion International Holdings Inc. (OTCBB:AXIH) Really Blowing Up
If you’ve been following Axion International Holdings Inc. (OTCBB:AXIH) over the last couple of weeks or so, you know that things have really been heating up around the company. First, Club Penny Stocks received $10 thousand to tout the ticker in late-November, but while some upward momentum was indeed formed, the weak trading volumes suggested that not a whole lot of people were paying attention.
That changed on December 3 when the company issued a press release informing us that their new wholly owned recycling subsidiary has signed a three year contract with an unnamed thermoplastics company which should result in additional annual revenues of around $12 million over the next three years.
This really sparked investors’ interest and after just seven days, the ticker managed to jump from $0.62 all the way to over $1 per share. These levels had been a mirage for the ticker for more than two years and, at first, it seemed that they’re a bit high. AXIH showed some hesitation but on Friday, it managed another surge in the right direction. The price jumped by no less than 35% and stopped at $1.30. More than 800 thousand shares changed hands which means that the dollar volume stands at over $881 thousand – value that hasn’t been achieved in more than a year. The reason?
Well, before the start of the intriguing session, AXIH announced that the company CEO, Steve Silverman, will discuss the recent milestones in a conference call tomorrow and we’re quite sure that traders were happy to hear that. Communicating freely and regularly with the shareholders is something that many penny stocks struggle with and AXIH‘s decision to keep investors updated will certainly help them solidify their reputation as a solid enterprise. But is this alone enough to push the price so high?
We reckon that there was something else getting traders excited and that thing comes in the form of a Seeking Alpha article published on Wednesday. It was written by a contributor known as Matthew Dow who also claims to be an AXIH shareholder. He seems generally optimistic about the future and yet, unlike other contributors who just tout random tickers that supposedly show some massive growth catalysts, Mr. Dow doesn’t fail to mention that there are quite a lot of risks involved in a potential AXIH investment.
As always, we reckon that it’s best to base your investment decision on your own due diligence rather than on the opinions represented in articles around the Internet, but apparently, optimistic coverages still work when it comes to gathering attention.
As you probably know, however, in Pennyland, this is not always a good thing. We already saw that the $1+ levels might be a bit high for the stock and there can be no guarantees that it will manage to withstand the increased pressure this time. The conference call should give traders and potential investors a better view of the future, but, as always, the only thing that could send the ticker on a continuous run is a solid balance sheet and a positive bottom line.
The new $42 million contract should push AXIH closer to these milestones, but it can not guarantee success. Another risk factor that we talked about in our previous articles (Mr. Dow also mentions it) is the number of outstanding convertible notes and preferred shares that could also influence the price. On the whole, AXIH‘s shareholders are not out of the woods just yet, which means that the time frame and the amount of invested money in the company should be well thought through.
Speaking of risky penny stocks, we should probably mention the performance of Dewmar International BMC Inc (OTCMKTS:DEWM) – a ticker that managed to jump up by more than 350% in a single session after the company CEO issued some optimistic news. Unfortunately, it ran too high for its own good and in a matter of just two days, it lost around a third of its value. Of course, AXIH seems to be a much more solid entity when compared to DEWM, but even so, corrections are not out of the question.