Big Tree Group Inc (OTCMKTS:BIGG) With an Explosive Start of the Year
The first session of 2014 proved to be quite an eventful one for Big Tree Group Inc (OTCMKTS:BIGG). The ticker opened the day at $0.26 (13% above its previous close) and made a huge rally during the first couple of minutes. An intraday high of $0.45 was reached shortly after, but then, the price started sliding and when the closing bell rang, it was back at $0.265. As you can see, the performance is far from perfect, but there’s still around 15% in daily gains. What’s more, the ticker registered a record-breaking trading volume of around 1 million shares. But what’s the reason for all the commotion?
As is often the case in Pennyland, the intense trading was caused by a press release which came out about an hour before the opening bell. In it, BIGG‘s management team said that their expectations of record-breaking revenues have been confirmed. According to the press release, the 2013 10-K, which should be published in March, will contain a figure of over $45 million in the sales section and around $0.14 in the earnings per share one. These sort of results are extremely rare in Pennyland and they are bound to cause some excitement, but is there anything to suggest that they’re actually achievable?
A definitive answer will be found in the annual report, but we should point out that the projections don’t seem too far-fetched.
BIGG has been in the toy manufacturing and distribution business for quite some time now and it’s fair to say that things have been going along nicely. In 2011, for example, the company logged annual revenues of around $15.7 million while sales during 2012 resulted in over $33 million in proceeds. If the trend continues, $45 million in 2013 doesn’t seem out of reach.
The latest 10-Q could also serve as proof that BIGG is moving forward. Here’s a summary of the most important figures as of September 30:
- cash: $126 thousand
- current assets: $12.5 million
- current liabilities: $10 million
- quarterly revenues: $16.3 million
- quarterly net income: $591 thousand
You can see that there’s quite a lot of debt but even so, BIGG do have some working capital and they say that lack of cash shouldn’t be a problem. The only immediately obvious problem is the year-over-year shrinkage in the net income but, according to the management team, this is a part of their efforts to gain a bigger share of the market.
On the whole, BIGG has made quite a lot of progress since it became a publicly traded enterprise, but when you check out the stock’s historic performance, you’ll see that investors seem oblivious to the company’s advantages.
The ticker was hovering around $0.001 back in December 2012 and in an attempt give the price a boost, the management team decided to do a reverse split. The effects were visible in February when BIGG briefly jumped above $2 per share, but once again, trading volumes were small and soon after, it took another nosedive reaching as low as $0.15 at the beginning of October. Apparently, that’s when someone decided that a paid pump was in order.
Since October 22, we have received more than forty (and counting) promotional emails from various outfits like Wall Street Buzz, Awesome Stocks, Hot Stock Ace Publisher, Market Alert and Whisper From Wall Street and while they are helping raise awareness, they are also adding another layer of risk to a potential investment.
The performance has so far been rather shaky and it could turn out to be even more turbulent as the number of people keeping an eye on BIGG is increasing. That’s why, considering all the potential dangers and timing your trades well is absolutely crucial.
