Real Industry Inc (NASDAQ:RELY)
Real Industry Inc (NASDAQ:RELY) stock cratered on Friday, losing over 65% on a volume figure that was almost 90 times the listed daily average. RELY shares gapped down to open at $1 from their Thursday close of $1.70, then went on to make a new 52-week low of $0.25 before closing at $0.65.
Sherman Oaks, CA-based Real Industry Inc (NASDAQ:RELY) is a holding company that seeks to create a sustainably profitable business acquiring companies that meet strict metrics with regards to value and structure. Our business strategy also seeks to take advantage of Real Industry’s U.S. federal net operating loss tax carryforwards of $916 million.
The company, through its subsidiaries, is involved in aluminum melting, processing, recycling, and alloying activities in the United States and internationally. The company operates in two segments, Real Alloy North America and Real Alloy Europe. It processes scrap aluminum and by-products. It manufactures wrought, cast, and specification or foundry alloys. The company serves the automotive, consumer packaging, aerospace, building and construction, steel, and durable goods industries, as well as wrought alloy producers, foundries, and casters.
Real Industry Business
Real Industry Inc (NASDAQ:RELY) reported sales of $1.25 Billion for 2016. However, the company has a market capitalization of less than $20 million. Earnings have been negative since 2012 when the company posted a per share loss of (-$0.34). By 2016, that loss had grown to (-$3.71).
Unfortunately, the earnings losses were not the only headwind experienced by shareholders. In 2014 the company had 13.4 million shares outstanding. In the next two years the company issued more shares, thereby diluting shareholder equity, and by the end of 2016 the number of outstanding shares was listed at 28.72 million.
RELY Stock Performance
In mid-2016, RELY shares were hitting resistance at $9. A steady slide in the share price ensued and by August shares were meeting support around $1.75. Then, On Friday, RELY shares plummeted below the $10 handle. That level is not just important psychologically, the NASDAQ Market has rules that mandate a share’s bid price remain over $12 for a specified amount of time or else the stock could be de-listed.
Year-to-date, RELY stock has lost over 90% of its value. In the past week it has lost 64% of its value. However, the two firms that follow Real Industry Inc (NASDAQ:RELY) rate RELY shares as a “Strong Buy” with a consensus, one-year price target of $5.
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.