Up 100% in one week – where is the speeding ticket?

04831505-3C77-473C-A44C-B13BECAF1CCC

While Howa Machinery (6203), Japan’s largest small firearms manufacturer, has had its index weight lifted within Topix on Oct 5, the shares have jumped another 100% since reporting on it last week. Will the JPX issue a speeding ticket to investigate a 100% rise in a stock that has already risen 100% in the last 12 months on zero positive news flow? The answer is no. While ETF inclusion and index buying of an illiquid stock can explain away some of the rise, the fundamentals don’t match the performance. Up another 10% today.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s