Etrion Corporation is an independent power producer which develops, builds, owns, and operates utility scale power generation plants. It currently has a 139 MW installed base of solar capacity in Italy, Chile, and Japan.
In the company’s latest presentation to investors in July of 2016 it was mentioned that the Lundin family owns 24.3% of the company while directors and managers control 6.7%. Fiscal 2015 revenue was reported as US$50.4 million with a head count of 30 employees.
The market capitalization of ETX is $123.61 million and average daily volume over the last three months is 5,892 shares. By these metrics you would have to label the stock as speculative.
A probe of the charts will help identify the major factors in play with this stock.
The three-year chart provides a textbook example of a stock struggling with a long decline that started in early 2014 when it traded near $0.80. From there the shares breached the 50-day moving average in March of 2014 and then the 200-day moving average in June. Concurrent with the break in June a death cross surfaced informing the knowledgable investor that they could expect selling pressure to continue.
A downtrend line has dominated the chart over the last two years and only recently has the stock broken through the resistance it enforced.
The six month chart depicts the choppy trading that has been the tale of the tape for EXT. The move up and through the moving averages in August of 2016 were foreshadowed by the buy signals generated by the MACD and the RSI. The shares hit resistance at $0.40 and have pulled back.
I would advise caution with ETX based on its thin trading. It doesn’t take much to move a stock that trades on average just under 6,000 shares a day over the last three months.
Next time I will examine 5N Plus Inc. (VNP TSX)
Make it a profitable day and happy capitalism!