No Explanation for Rise of Rentech, Inc. (NASDAQ:RTK)

Rentech, Inc. (NASDAQ:RTK)

Rentech, Inc. (NASDAQ:RTK)

Rentech, Inc. (NASDAQ:RTK) shares are up over 20% in early trading, and on heavy volumes, despite a lack of any public news that could account for such a strong move. RTK shares closed yesterday at $0.55 and opened at the same price. However the shares quickly took off and hit their inter-day high, as of 11:15 AM EST, within 30 minutes. Volumes followed the same trajectory. Rentech, Inc. (NASDAQ:RTK) has a 30-day, daily volume figure of just under 250,000 but by 11:15 AM EST over 5.7 million shares have traded hands.

Rentech, Inc. (NASDAQ:RTK)
15 minute bar graph $RTK July 6

Rentech, Inc. (NASDAQ:RTK) is a Canadian-based company that owns and operates wood fiber and wood pellet processing businesses. Rentechs’ New England subsidiary produces bagged wood pellets for the U.S. heating market. The President, CEO, and Board Member of Rentech, Inc. (NASDAQ:RTK) is Mr. Keith Forman. Mr. Forman has a background in master limited partnerships (MLPs). He has worked with MLPs in a variety of roles including as a banker, a senior executive and a director since the inception of MLPs in the 1980s. He previously served as chief financial officer of Crestwood Midstream Partners L.P., a private investment partnership focused on making equity investments in the midstream energy market.

Recently insiders have increased their aggregate stock position in Rentech, Inc. (NASDAQ:RTK) by over 250% while institutional investors have been divesting themselves of the stock. Another metric that stands out is the amount of cash per share of RTK. Latest reports put that figure at $0.98 which is about 1/3 more than what the shares are trading for. While Rentech, Inc. (NASDAQ:RTK) is down over 77% YTD, the shares are up over 25% for the past month. That upward move has given RTK shares a Relative Strength Index reading of over 79 which most observers believe is firmly entering “overbought” territory even though Rentech, Inc. (NASDAQ:RTK) is well off its 52-week high of $3.97. Of concern is the company’s inability to turn revenues into profits. In 2013, RTK shareholders had a per share profit of $0.22. However the next year shareholders experienced a loss of (-$1.85) and that per share loss expanded in 2016 to (-$6.18)

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: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Author: James Marion

James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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