Over the course of the last five months, no major changes took place regarding the stock performance of Absolute Life Solutions, Inc. (OTC:ALSO). The price revolved around $2 per share as the volume of traded shares topped 20 thousand per session on only one occasion. There were some days, like the last trading sessions on Thursday and Friday, when there was no trading activity whatsoever, keeping the price at $2.3.
Now, it is worth-mentioning that the company only recently entered the stock market. It was founded in 2006 under a different name. In the following years, different types of acquisitions took place. The last one in May 2010 and the majority stockholder at that point sold their ownership interest to the current shareholders of the company. Stock splits followed, together with the registering of the new name “Absolute Life Solutions, Inc.” and of course the changing of the sphere of operations to specialty financial services. When the newly formed enterprise stepped first into the stock market last July, there was no trading activity, yet the price increased from $2 to $7 per share in a matter of a few weeks. Then, in the following sessions there was some interest from investors, which ultimately resulted in the all-time low of $1.1 per share in September. Since that time the price has increased to its original level of $2 and keeps its position up-to-date.
The field ALS operates in is often referred to as somehow obscure. What the company does in fact is buying life insurance policies from old people who are either unable to pay the benefits or have other reasons to sell them. These activities are generally referred to as a long-term investment, since the buyer is obliged to pay the premiums for as long as the insured person is alive. Once death of the seller occurs, the buyer is entitled to the death benefits according to the life insurance policy. There is also an option to resell the ownership of the insurance prior to the death of the insured person.
While some people refer to it as a highly lucrative business, others are not as certain as to whether this business would last and can bring any possible returns. An example of this is the very low activity on the market for ALS stock, which by the way is according to the company a very bad situation.[BANNER]
In the last 10-K form filed in 2010, it is stated that if the market for the company’s stock develops, there is high risk that the price may fluctuate dramatically due to several reasons. For this type of business, underwriting activities can significantly affect the future development of the company, let alone the actual effect of the decisions made today can bring results after five or more years. A time frame that not all common stock investors are fine with.
In this aspect, it is perhaps too early to make an assessment of the potential return on investment in the stock, especially as there are obviously not too many investors looking to buy ALS shares these days.
