Damn it all to hell, it’s tough to write about Berkwood Resources (BKR.V) these days.
Not because the company isn’t doing what it promised. It’s doing exactly what it said it would.
And not because it isn’t growing. The company continues to obtain new assets.
And not because it’s not intersecting ore. It’s been doing that.
And not because mining is in some slump. We’ve got client companies on an absolute tear right now.
And not because they don’t put news out. Heck, Berkwood has news aplenty.
And not because there are too many shares out (there’s only 22m), or because the company is diluting itself (it isn’t) or there’s not enough cash (they just raised some) or because the CEO is asleep at the wheel, or any of the myriad things you can get pissed at a public company over.
No, I’m pissed about Berkwood because despite it doing everything it should, despite being in a strong sector and doing the work on the ground and being right next door to a monster and having acquired land that horseshoes around that monster and the CEO being in my inbox explaining next moves on a constant basis… someone – someone who clearly bought the stock cheap way back when – keep selling into any rise, and in numbers high enough to kill said rise.
Here’s today’s action, after Berkwood put out solid news that it had intersected graphite in every hold of its drill program:
That’s a nice big jump on the news, which you’d expect. I expected it. The company likely did too.. From $0.31 to over $0.45 in the first hour was a great result.
But then came the selling.
Hey, you’d expect some on a 50% jump – folks are going to take their profits, and they should. But selling all the way back to where it started from, pre-news?
That’s some serious jiggeryfuckery right there.
It was around a month back that BKR put out similarly good news – September 6, to be exact. That saw increased buying, as expected, and then a pronounced sell-off for the rest of the month, for no good reason.
Don’t blame the boss for this: Insider documents show nobody’s been selling the stock in the C suite.
This kind of thing happens sometimes. Someone gets in early and cheap, and bleeds out their stake every time good news comes along, leaving investors tired, suspicious, and short on patience. The company suffers because when they go to raise finance, it’s at a lower price than it should be, and the long term shareholders suffer because they know what’s happening and don’t want to buy more because they’re concerned they’re giving money away.
And us? We get the shits because we see good things and talk about them and put our own money in (we’re shareholders in BKR), but soon get to a place where we start to second guess any suggestion we should write about the company.
I mean, why waste the ink giving some rando a higher getting-off point?
Berkwood Resources, right now, isn’t a buy. It should be. It should be a screaming, all day long, get your doughbucks in, we’re all going to eat steak for days kind of buy. But it isn’t. It’s a frustration. And it will continue to be that until the mysterious seller (or sellers) are done churning out of the thing.
I know this is frustrating for CEO Thomas Yingling, who has genuinely performed well in his role and done everything one would hope for as an investor. He’s even done a virtual reality tour of the property (see bottom of this story).
But, for god’s sake, it’d be nice if there was a deep enough junior market that situations like this didn’t occur.
Good companies should be rewarded. Eventually this one will..
But for now, don’t buy on news – buy on the sell-offs.
And hope the seller runs out of paper before the news starts getting serious.
— Chris Parry
FULL DISCLOSURE: Berkwood Resources is an Equity.Guru marketing client, and the author owns stock in the company.