Horsehead Holdings Corp. (NASDAQ:ZINC) Remains Highly Volatile

[[tagnumber 0]][[tagnumber 1]]When it comes to volatile chart behavior, the stock of Horsehead Holdings Corp. (NASDAQ:ZINC) is among the first to come to mind and if you look at the stock‘s performance over the last six months, you will know exactly what we mean. First, the stock first went down from $14.66 to $2.45, a whopping 84% depreciation in value, from early–May to late–September. Then it soared 124% to $5.51 within a single week before going back below the $3.00 threshold in the weeks that followed.[[tagnumber 2]] [[tagnumber 0]]Yesterday, Horsehead‘s shares closed trade at $2.92 per share, up 0.52% than the day before, on a volume of some 2.3 million, which is slightly higher than the daily average turnover. Less than two hours into today‘s session, the stock is 4% down to $2.80 per share, thus remaining far behind the 52–week high of $16.77 achieved on Nov. 26, 2014. This performance has now raised a lot of questions regarding the company‘s potential in the forthcoming quarters and we have looked at what analysts had to say about that.[[tagnumber 2]] [[tagnumber 0]][[tagnumber 6]]ZINC is involved in the production of zinc and nickel–based products. Based on its most recent financial reports, the company has been raking in revenue in excess of $100 million per quarter and expects to announce a similar number when it publishes its Q3 2015 report on Nov. 9, 2015. As it seems, however, these numbers have all proved insufficient to cover Horsehead‘s costs, which is why ZINC has been incurring one net loss after another, at least for the last four quarters on record.[[tagnumber 2]] [[tagnumber 0]]In other words, the company has not been making any money for more than a year now. On the flip side, ZINC beat analysts‘ estimates in three out of the four quarters in questions. There is a silver lining in their future forecast, as well. Based on the latter, ZINC‘s earnings per share are expected to go in the black as early as next year and continue to grow into 2017.[[tagnumber 2]] [[tagnumber 0]]Until that time comes, however, ZINC might need to raise external capital to keep its operations going and the at–the–market equity offering sales agreement announced on Oct. 23 reveals just that. According to the latter, ZINC will have the option to raise (or not to raise) up to $50 million through the sale of common stock using a few stock agents. Given that the company is still having trouble getting its newly constructed zinc facility in Mooresboro, NC to operate at full capacity, fresh external capital seems plausible at this stage.[[tagnumber 2]] [[tagnumber 0]]According to the company‘s most recent updates, management has taken measures en route to working at full capacity, yet there are no guarantees as to when exactly this will happen. In this respect, further volatile chart movements would hardly come as a surprise among ZINC investors. What is known for sure, however, is that there has been much more interest in the stock for the last month as compared to earlier periods as indicated by the sheer increase in the stock‘s volume. This development bodes well for shorters because it results in a much lower days–to–cover ratio should things go wrong for them. In addition, the insiders‘ confidence in ZINC implied by the intensive insider buying for the last twelve months could also be deemed positive in the eyes of outside investors.[[tagnumber 2]]