Giga-tronics Inc. (NASDAQ: GIGA) seems to be defying logic. Usually it takes a buyout or some crazy news to make a stock nearly double. What is so interesting is that this is the second time this has happened — just this month alone!
The company announced Tuesday morning that it has received an order from the Naval Air Warfare Center in Pawtuxet River, Md., associated with its Model 8003 Precision Scalar Analyzer. This order was said to be valued at roughly $2.4 million.
So really — a $2.4 million order and a stock gain of 85%?
Giga-tronics also said that it anticipates shipping the equipment to the Navy over the next six months. Note that the company’s earnings report is coming out in just under a week.
Back on June 2, we said on its last double:
The agreement will have Giga-tronics develop a variant of its high-performance fast-tuning YIG filters for a third aircraft platform. … The company said that it has now received orders valued at approximately $6.9 million in connection with the agreement for the non-recurring engineering and for the delivery of a limited number of flight-qualified prototype hardware.
What is so baffling about Giga-tronics is that its market value of $23 million is so small that most investors have never heard of the company, and most investor screens would completely ignore the company due to its microcap size.
Giga-tronics had revenues of almost $14.2 million in its fiscal 2013. It was only back in February that the company announced the receipt of a notification letter from the Nasdaq Stock Market advising it of a failure to comply with the required minimum of $2,500,000 in shareholders’ equity for continued listing on the Nasdaq Capital Market — falling to shareholders’ equity of $2,044,000 for the quarterly period ended December 28, 2013.
At almost 2:00 p.m. ET, Giga-tronics shares were up almost 86% at $4.55 on more than 12.8 million shares. This stock has a 52-week trading range of $0.90 to $4.78. That $4.78 took place on Tuesday, and that was just shy of a double from the $2.45 closing price on Monday.
Sometimes the big movers trade like buyouts, but without a buyout.