Acorn International Inc. (NYSE: ATV) led the bulls in Monday’s session following the announcement of a newly authorized share repurchase plan. By the way that this stock is moving, it could be a day trader’s dream.
When the markets opened Monday, the stock was at $6.94, an increase of 73% from Friday’s close. However the climb was just starting.
The company announced that its board of directors has authorized a share repurchase program to repurchase up to $2 million worth of its American depositary shares over the next 12 months.
Prior to this announcement, the company only had a market cap of $16.7 million, which would make the repurchase authorization only 12% of the cap. Yet, traders appear to be pouring into the stock to make something out of it at this point.
For some background: Acorn is a marketing and branding company in China, operating multiple direct sales platforms and a nationwide distribution network. Acorn’s direct sales platforms include outbound telemarketing centers, e-commerce websites and catalogs. Acorn has built a proven track record of developing, promoting and selling proprietary-branded products, as well as products from established third parties.
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Just in the past week (Wednesday), Acorn regained its compliance with the New York Stock Exchange. However there was not a big move from this.
The move that was seen on Monday is proof that despite a weakened economy and currency, investors are still willing to buy into the Chinese growth story.
Over the past 52-weeks (to Friday’s close), this stock has dropped 59.6%, but what is more impressive is that since 2016 began this stock is down over 26%.
Shares of Acorn were last seen trading up over 130% at $9.24, with a consensus analyst price target of $4.00 and a 52-week trading range of $0.60 to $20.85.
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