Anything Brewing in Empire Resources?

What happened in Empire Resources Inc. (ERS-AMEX) shares today?  We often screen for small cap metals-related companies and this one was a head scratcher today to more than just us.  There wasn’t any real news yet the stock moved up 15% on more active than normal volume.  The stock traded 1.3 million shares. 

Empire Resources is a Fort Lee, New Jersey-based distributor of value-added, semi-finished aluminum products whose main markets include North America, and though a subsidiary, Empire Resources Pacific Ltd., Australia and New Zealand.

With the word aluminum you have to assume someone is trying to call for a takeover, although we have not heard anything along those lines that has any credibility.  Some small cap traders have said that may be the case, but trust is hard to come by these days and you never know who is out just trying to tout a stock they are in long and wrong.   

ERS closed at $11.72, and its 52-week trading range is $8.10 to $64.20 (yes, that’s a sixty-four).  There are no major brokerages that maintain active coverage, although the company has been profitable.  It has a tiny market cap at $114.7 million and a large portion of the company stock is tied up by insider ownership.  As of January the short interest was over 1.1 million shares, which is apparently 25% of the free float.

Jon C. Ogg
February 1, 2007