CSP Inc. ($CSPI) Surges after Reporting Q2 Results
CSP Inc. ($CSPI) Surges after Reporting Q2 Results
Shares of CSP Inc. (NASDAQ: $CSPI) jumped more than 25% this morning, reaching a high of $4.62 in today’s early trading. Together with its subsidiaries, Billerica, Massachusetts-based CSP Inc. develops and markets information technology integration solutions and high-performance cluster computer systems. At last check, the small-cap stock was up 21.20% to $4.23, with volume up from daily average of 4,000 to 294,000.
On Tuesday, CSP reported its second-quarter results, posting a quarterly sales jump of 6.3% to $23.9 million. Second-quarter net income soared by 367% to $989,000, or $0.28 per share. According to the company’s latest 10K filing, the company depends on a small number of customers to generate a major portion of its revenue. So, loss of any customer could have a significant impact on the company’s financial performance. This makes the small-cap stock very volatile. The company also highlights in its 10K that the loss of a supplier, the addition or departure of key personnel, regulatory changes, and fluctuations in operating results could have a significant impact on its stock, which has historically been very volatile.
The 52-week range for the small-cap stock has been $2.62-$4.62, with the high of $4.62 reached in today’s trading. Shares of CSP currently are trading above its 50-day and 200-day moving averages. The fact that CSP is a high technology company makes the small-cap stock very volatile. Also, a significant portion of its revenue comes from the defense sector. So, the company’s and the stock’s performance depend largely on a single sector, which we think makes the stock very risky. Also, the stock is very thinly traded. It has an average daily volume of only 4,000. Having said that, the company’s performance is definitely impressive and justifies today’s rally. Overall, we think that the company will have to expand its client base and cut its exposure to a single sector. Like all small-cap technology companies, CSP could be a potential takeover target, which could make the stock an interesting play.
About Microstockprofit.com
Microstockprofit.com is committed to producing the highest-quality insight and analysis of small cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily on the underserved OTC stocks market, or “penny stock” market, which has traditionally been shunned by Wall Street. We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.
