The mystery of CKX Land (NYSEMKT:CKX) has been solved. On Tuesday, CKX Land spiked up in price from $13 to $24.50 per share leaving me flabbergasted and a little wealthier. I dumped my entire position and then watched it fall back to the $14 range. So what’s the answer to the mystery?
It’s an oil and gas company!! Every small cap energy stock out there spiked up in price. It was my mistake to try to find a fundamental reason behind it. Oh wait...the price for an asset always reflects its fundamental value, doesn't it? There's never any speculative money pushing the price up above its intrinsic value? No way, that couldn't happen.
Here are some others that spiked up. Most of these I have never heard of and none of them I own.
Blue Dolphin Energy Co. (OTCQX:BDCO)
BPI Energy Holdings (BPG)
Tengasco Inc. (NYSEMKT:TGC)
Venoco, Inc. (NYSE:VQ)
Samson Oil & Gas Limited (NYSEMKT:SSN)
Fieldpoint Petroleum Corp. (NYSEMKT:FPP)
Now my two favorites:
Mexco Energy Corp. (NYSEMKT:MXC)
Pyramid Oil Co. (NYSEMKT:PDO)
So what's the point of this diatribe? A stock can trade above its true or intrinsic value - it happens all the time. A cynical value investor like myself would say most of the time. So why can't a commodity trade above its true or intrinsic value?