Aspen Group Inc (OTCBB:ASPU) Slips Without Warning

Last week, the analysts at Zacks upgraded Aspen Group Inc (OTCBB:ASPU)’s stock. They placed a Buy rating on it and said that it could reach a price target of $0.25. Investors aren’t entirely sure.

At first, they didn’t react to the upgrade at all and they preferred to stay away. Yesterday, we did see some trading, but instead of pushing the stock up, the increase volume dragged it down. A 52-week low of about $0.09 was reached and ASPU logged a close of less than $0.14 for the first time since August 2014. This is not the sort of performance Zacks wanted (or expected) to see, but what are the chances of ASPU recuperating the losses?

Well, the fact that analysts are covering the stock should mean that we’re not talking about a development stage company with big ideas and bigger problems. ASPU have been around for a while and it’s fair to say that, especially when compared to the achievements of other OTC enterprises, their business has been rather successful. On January 31, for example, they had:

• cash: $1,158,339
• current assets: $3,001,082
• current liabilities: $1,833,622
• quarterly revenues: $1,286,138
• quarterly net loss: $1,244,322

Indeed, the losses are still quite substantial, but the company announced a couple of months ago that the revenues are growing even further. Apparently, the company managed to log $1.54 million in sales during the fourth fiscal quarter. The 10-K should be filed next week and the shareholders are hoping that it will show some improved profit margins.

So, in theory, there should be no shortage of things pushing ASPU in the right direction. Yet, despite this, the stock seems far too unstable. Take its performance from September of last year as another example.

Back then, Leon G. Cooperman informed investors that he has poured quite a lot of money into the company. Mr. Cooperman is one of the wealthiest and most successful investors out there, so when they heard that he has initiated a position, small retail investors were understandably eager to jump in. A 52-week high of just under $0.40 was reached pretty quickly, but soon, the excitement died down and the stock started slipping.

Mr. Cooperman has since then increased his position in ASPU and he currently owns almost 10% of the company, but despite this, the ticker is refusing to fly high. In addition to Mr. Cooperman, some other people also received quite a lot of ASPU shares over the last few months and they might be unwilling to wait until the ticker levels off. As we saw yesterday, a sudden wave of selling could come a long way, so treading carefully might not be a bad call.