Now this is a stock that most likely not many of you will know, as it is Dutch in origin. Flowtraders is a so called flash trader with proprietary technology which profits on high market volatility and market volume. Without going into all the details, it is worth your time checking out their corporate website for more background: www.flowtraders.com
As we saw yesterday, the January rally has been slowed down, reversal is getting more likely. As a contrarian, we saw the VIX index spike yesterday with +16% as a reaction on the various news events on economic conditions (Europe).
As you can see in the chart, Flowtraders' stock price rises when uncertainty enters the market, be it either bearish or bullish - more trades are being made which is good for the company. Currently the stock is at bottom support and in my opionion way undervalued at the current price. So why did this stock drop so hard this morning is what you may ask yourself?
Analysts expect a net trading volume for Flowtraders of 72,1M for the coming quarter. That is an increase of 70% (!) compared to the same quarter last year and 80% compared to the prior year. Net gain (profit) trippled (!) compared to the previous year. However, analysts were also disappointed in the dividend proposed for 2018 which the company set on 2,35 euro per stock (!). Expectations with the current cash position and upside were that it could have been at lease 3 euro a stock by now. So, dissapointed in a stock that pays a dividend of 2,35 euro a piece already... (?)
If we look at the moneyflow, we see an increase on a dropping stock price . This is a classic divergence we see in an accumulation phase which we know is followed by a mark-up phase. With the current quarter coming, looking at the Dow Jones, S&P 500 or any index of your choice and a rising VIX I expect volatility to increase. These are perfect conditions given the companies business model.
As always, do not trade off solely on my analysis but do your own research! I just wanted to share this perspective
Peace
As we saw yesterday, the January rally has been slowed down, reversal is getting more likely. As a contrarian, we saw the VIX index spike yesterday with +16% as a reaction on the various news events on economic conditions (Europe).
As you can see in the chart, Flowtraders' stock price rises when uncertainty enters the market, be it either bearish or bullish - more trades are being made which is good for the company. Currently the stock is at bottom support and in my opionion way undervalued at the current price. So why did this stock drop so hard this morning is what you may ask yourself?
Analysts expect a net trading volume for Flowtraders of 72,1M for the coming quarter. That is an increase of 70% (!) compared to the same quarter last year and 80% compared to the prior year. Net gain (profit) trippled (!) compared to the previous year. However, analysts were also disappointed in the dividend proposed for 2018 which the company set on 2,35 euro per stock (!). Expectations with the current cash position and upside were that it could have been at lease 3 euro a stock by now. So, dissapointed in a stock that pays a dividend of 2,35 euro a piece already... (?)
If we look at the moneyflow, we see an increase on a dropping stock price . This is a classic divergence we see in an accumulation phase which we know is followed by a mark-up phase. With the current quarter coming, looking at the Dow Jones, S&P 500 or any index of your choice and a rising VIX I expect volatility to increase. These are perfect conditions given the companies business model.
As always, do not trade off solely on my analysis but do your own research! I just wanted to share this perspective
Peace