The shares of Taku Gold Corp. (CVE:TAK), (PINK:TAKUF) seem to be forming a bullish pattern on the charts. Yesterday, they noted a record high for 2011 on the TSX Venture Exchange (CVE). The stock was perhaps boosted by the release of the new financial reports for the end of the past year.
There is no other news issued by the company to explain the spike of the stock. Are the financials the main reason for the 15.4% rise of the shares? One could only guess, in the absence of any other information provided by Taku Gold. We should mention two more aspects that outline the scale of the present stock rise. During the session TAK set a high of $0.47 – a price record for the current year. Secondly, yesterday’s trading volume was much, much larger than the average.
The mentioned financial statements look positive indeed. Perhaps, they inspired investors to appreciate so high the shares of the company. Taku reported a more than stable cash position of almost $8M at the end of 2010.
On the other hand, there are negative trends in the mentioned financials too. The company has no operating revenue and continues to incur losses. For the last quarter of 2010 the net loss was $0.7M, for the whole past year – $1.76M.
Moreover, shareholder dilution rose by 173% as the weighted average number of shares jumped strikingly: from 11.76M in 2009 to 32.2M in 2010.
Another negative fact – the stock looks illiquid. The average turnover from the last 30 days is just 188 thousand shares. It does not sound great, does it?
There is something else that Taku will probably have to change too. The company might try to issue more regularly official information to the public and to the traders. Thus, it will perhaps manage to shed more light on the sudden jumps in the trading activity of the shares.
In view of all mentioned so far, we have the right to put under a serious doubt the probability for a substantial rise in the stock price in the future. However, stock markets are unpredictable. If we trust the technical analysis, which is quite predictable but not always reliable, we shall notice that TAK has gone into the overbought area.
