Ferroglobe is going up -- but what's supporting it? Image source: Getty Images.
Continue Reading Below
For the fourth day in a row, Ferroglobe PLC (NASDAQ: GSM) stock went climbing, finishing the day up 17.3%. For the fourth day in a row, we haven't a clue what's behind its rise.
Ferroglobe stock began rising on Nov. 7, a day ahead of Donald Trump's victory in the 2016 presidential election, and at a time when his defeat seemed assured (said the pundits). True, the stock jumped again on Nov. 9, after Trump's success was assured. But that was more a continuation of a trend than the start of something new, and was accompanied by absolutely no news of note. Then, today, Ferroglobe stock really ran off to the races -- up 17%.
So what's going on with Ferroglobe? Clearly, it's nothing tied to the election results, and this makes the most likely culprit the company's third-quarter earnings report, which is due out the other side of this weekend, on Monday.
Continue Reading Below
What do we know about that report? Perhaps less than what the folks buying Ferroglobe hand over fist ahead of the report know, but perhaps we know only just as much as they do.
What we know is that in contrast to the year-ago quarter, when it earned a $0.20 per share pro forma profit, this time around Wall Street is lookingfor Ferroglobe to book a loss -- $0.01 a share is the consensus. Revenue last year was $175 million, though, and Wall Street is looking for a very big increase indeed -- all the way up to $415 million.
Whether Ferroglobe merely meets expectations, or manages to turn in another profitable quarter where Wall Street expects a loss (which would explain this sudden enthusiasm for the stock) remains to be seen. In any case, the mystery should be cleared up by Monday. Until then, I see no (confirmed) reason to get excited and join in the buying frenzy.
10 stocks we like better than Ferroglobe
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Globe Specialty Metals wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of November 7, 2016
Fool contributorRich Smithdoes not own shares of, nor is he short, any company named above. You can find him onMotley Fool CAPS, publicly pontificating under the handleTMFDitty, where he currently ranks No. 336 out of more than 75,000 rated members.
The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.