Appliance Recycling Centers of America (NASDAQ:ARCI)
Appliance Recycling Centers of America (NASDAQ:ARCI) shares are rocking the market after gaining over 100% on a volume figure that indicates a 400-times multiple on the average daily trading volume. On Friday, ARCI stock closed at $0.66 then gapped up Monday morning to open at $0.89 before hitting an inter-day high of $1.41. ARCI stock has since fallen and is trading between $1.10 and $1.30 as of Noon EST.
The market’s strong push for ARCI shares was a result of the company’s Q2 financial report which was released this morning. The company reported a 4.1% increase in revenues to $25.7 million. Gross profit increased 35% to $8.7 Million. Operating Income was posted at $2.5 Million, compared to (-$1.1) million loss for the same quarter last year. SG&A expenses of $6.1 million represented am 18% reduction. Net Income came in slightly over $2 Million, or $0.31 per share, compared to a previous loss of (-$2.1) million. However, maybe most importantly, Stockholders Equity increased to $15.1 Million ($2.27 per share) which represented a 40.15% YTD increase.
Appliance Recycling Centers of America (NASDAQ:ARCI), headquartered in Minneapolis, MN, sells and recycles household appliances through the ApplianceSmart brand – a chain of 18 company-owned retail stores. The company has revenue streams from both the retail and recycling sectors. ApplianceSmart sells new appliances as well as affordable value-priced, niche offerings, such as close-outs, factory overruns, and discontinued models. The company operates 18 ApplianceSmart stores. It also provides turnkey appliance recycling and replacement services for electric utilities and other sponsors of energy efficiency programs.
Appliance Recycling Centers of America (NASDAQ:ARCI has a market capitalization of only $4 million but the market clearly believes it has made the most out of its operations when considering its revenues, gross profit, and earnings. The company had a rough 2015 and 2016. Sales and earnings per share declined both years. In 2014 ARCI EPS was posted at $0.14. Then the company posted a loss of (-$0.47) in 2015 and a loss of (-$0.24) for 2016. The company posted sales of $130.9 million in 2014, then $11.8 million for 2015 and $103.6 million for 2016. Reports place the analyst’s consensus price target for ARCI stock at $4.00.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.