Benzinga’s PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.
On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.
When a low-priced stock that trades low volume has news on it, there’s going to be some fireworks.
The Company: Virtra Inc. (NASDAQ: VTSI) is a U.S.-based company engaged in the sale and development of the judgmental use of force training simulators and firearms training simulators for law enforcement, military, and commercial uses.
It sells simulators and related products across the globe through a direct sales force and international distribution partners. The product line of the company includes simulators, upgrade components, scenarios, scenario software, recoil kits, Threat-Fire, and other accessories.
Long-Term Dud: Based on the price history going back to March 2001, the company has been a serial underperformer. Its all-time high was made in April 2001 at $11 and the all-time low was made in August 2008 at $0.04.
Since mid-2019, it has bottomed in the $2 area on a few different occasions. The most recent ones being March, April and May of 2020, when it put three monthly lows between $2 and $2.03. The issue caught a bid with the broad market and rallied to end the year at $3.52.
Good Start To The Year: In early January, the issue found buyers just under the year-end close at $3.40, briefly rallied to $4.42, but retreated to end the month at $3.93. Once again, it found support just under the monthly close in early February, when it bottomed at $3.78 and ended the month just off its monthly high ($6.09) at $5.70.
Keep in mind that a vast majority of the time, it traded much less than 100,000 shares and on several occasions had days where it traded less than 10,000 shares. Until Tuesday’s price action, the issue had a 200-day average volume of 175,000 shares.
No Smoking Gun: When low float issues have large unexpected moves, it’s always interesting to review the prior day’s price action to determine if someone got the memo ahead of time. In this instance, this wasn’t the case as only 186,000 shares traded on Monday, with a small rally of $0.07 from $4.71 to $4.78.
After the close on Monday, the company announced fourth-quarter EPS of 19 cents, which beat the 4-cent estimate along with sales of $6.60 million, which beat the $5.49-million estimate. This marks the third quarter in a row the company beat on both metrics.
Price Action: Ignoring the ridiculous premarket action, when the issue spiked to $14.85 on heavy volume around 4:30 a.m. ET, the issue is higher in a volatile session. After a much higher open ($7.26 vs. $4.78), it had a brief retreat to $6.60, rallied to $9.26 and reversed course. As of 12:10 p.m., it’s trading actively in the lower $8 handle.
It should be noted that 55 million shares have traded with four hours remaining in the session.
Moving Forward: With the huge appreciation in price on unprecedented volume, Tuesday’s closing price (wherever it may be) may be a good level to follow over the next few days.
If the issue, can improve on that price and perhaps breach the current high, higher prices may be on the horizon. If the issue is unable to hold this elevated level along with a breach of the current intraday low, then it has a long way to fall to even reach the top of Monday’s range ($4.79).
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