Lund Gold Ltd. (CVE:LGD) (PINK:LGDOF) stock price rallied on Friday possibly in reaction to the most recent financial update from the company.
LGD stock price added 37.5% over Friday’s trading session. The accompanying trading volume was 847 thousand, more than 11 times the average of 77 thousand.
With this move the share price broke out of the most recent trading range. The intraday chart, however, showed that the advance in price wasn’t strong towards the end of the day, which usually leads to a correction over the next session.
The liquidity of this price move is also questionable. The intraday action was choppy and vague despite large volumes, meaning it was driven by a few big orders and there is little interest from the general public.
The move in price could be partially related to the company’s latest financial reports dated February 29. The company’s balance sheet virtually didn’t change at all though, but they managed to cut their quarterly expenses in half compared to the end of 2010. On the other hand, their exploration activities are very stagnant and thus the current market valuation doesn’t fit this business.
With the recent price rush Lund gained a P/B of 1.77, and its not really worth to have this valuation at more than 1.
