Armco Metals Holdings (AMCO) Melts Ahead Of Earnings

Ahead of their Q1 earnings call due to happen an hour after today’s closing bell, the Amex listed penny stock of Armco Metals Holdings, Inc. (AMCO) has managed to rise 0.01 from a new 52 week low set earlier today. Despite news from last week of having entered into a steel scrap distribution agreement with TEWOO Metals International Trade Co., shares of AMCO stock are down -33.75% since the metal seller/recycler converted $5.55M of debt into 17.5M shares. After coming off a year whereby sales grew significantly, but gross profit shrunk, long-term optimism that 0.40’s will return this year is opening up the doors for an easy double which might even get cheaper tomorrow.

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AMCO Stock Quote

Market Cap: 7.07M
Last: 0.21 ▼ -0.02 (-8.70%)
Volume: 133,531
Avg Vol (3m): 541,627
Open: 0.23
High: 0.23
Low: 0.20
Trades: 139
14-Day RSI: 25.86%
1st Resistance Point: 0.2334
1st Support Level: 0.2083
52Wk High: 0.58
52Wk Low: 0.20

Armco Metals Holdings recently came off a year where growth was evidenced on a number of key locations on their balance sheet and income statement, yet due to some counter growth line items, today’s Q1 earnings call should be subjected to scrutiny, especially by investors who own shares well above the 0.35 level. The reduction of current debt and improvement of gross profit from operations are sure to be 2 key elements which will determine whether or not AMCO stock sinks lower come Wednesday.

Looking back at the 10-K for the year ended December 31, 2013, Armco Metals increased their current assets during the course of the calendar year by roughly $15 million, from $38.95M to $53.75M, while the growth of current liabilities by almost the same amount cancelled any positive impact the increase could have created. As for revenue growth, the increase of increase of roughly $22 million, from $106,569,474 to $128,738,194, was almost immediately a meaningless achievement when witnessing that gross profit from those revenues shrunk to $3,311,522 when compared to the $8,467,062 booked for the year ended December 31, 2012 on lower revenues.

However, operating expenses and other expenses both decreased by roughly $1.6 million when compared to the year prior which does indicate that there is a remote possibility that Q1 earnings later today could prove that Armco Metals has gotten their back office tightened up a bit. The acquisition of Draco Resources, Inc., a California-based corporation engaged in the exploration, mining, and trading of iron ore and minerals, should also offer some better all-around numbers for the Company come Q2 and Q3 which should also help AMCO return back to above 0.30 prior to the end of the summer.

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About AMCO Stock

Armco Metals Holdings, Inc., conducting operations primarily in China, is engage in the business of metal ore trading and distribution as well as scrap metal recycling. Our operations are conducted primarily in China.

Click here to view the SEC filings for AMCO.
Click here to view the website for Armco Metals.

Authorized:
Issued and Outstanding:

Last 5 Trading Sessions:

Date Open High Low Last Change % Change Volume
05/20/14 0.23 0.23 0.20 0.23 unch unch 107,596
05/19/14 0.23 0.24 0.22 0.23 -0.01 -4.17% 185,600
05/16/14 0.25 0.26 0.23 0.24 -0.02 -7.69% 239,500
05/15/14 0.27 0.27 0.24 0.26 -0.01 -3.70% 173,400
05/14/14 0.27 0.28 0.26 0.27 unch unch 118,900

 

Bottom Line:

Expecting to see volume suddenly explode on this penny stock is as likely as seeing AMCO reach $1 before Friday. The increased shares issued due to the acquisition of Draco and the fact that it occurred after the end of Q1 could mean that, unless details are provided during the conference call later this afternoon, seeing AMCO stock back above 0.30 could take for the Q2 results to go public.
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