I have been following this company for a while and have both made and lost money. Although it started out as a penny stock for me it has jumped over 150% in a week and closed today at $3.61 up $0.39 (12.11%) -- for a total gain to date of 502%. So why am I complaining?
The reason is that I cannot find out what the stimulus was to make it out pace an already exuberant market. The following is a two month chart.
The earnings report out two weeks ago only convinced me it was not going out of business (yet) but it did not seem like a reason for such glee. I have not found dramatic news regarding the CMBS market, nor is there news of insider buying, or even Newcastle buying back shares. I hope we do not find out that this is just another Wall Street scam. Perhaps that news will be announced in the near future but for now there is nothing.
The following ten year chart explains why I was interested in Newcastle. Recently I have made mention of "my pal Sir John" (Templeton) in recent stories and you can see here that the stock was trading for dead, at it's all time low.
I decided that I could make money as long as the company stayed in business. Well, for now it has, and I have, but I would feel much more secure if I had some tidbit of a reason for my good fortune. It's not just curiosity or even fear. I want to learn because there might be a lesson that I could apply again.
Maybe the stock has been juiced by speculators betting that the federal government will buttress the CMBS market. For now I will be vigilant and take a portion of my gain off the table. If anyone has any information to share I'm sure there will be many investors who will have great interest.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture and planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares and options of NCT.