Those of you who follow or own DLH Holdings (NASDAQ:DLHC) know that the stock is up about 75% in the past 10 trading days. Some may wonder why... there hasn't been any bullish news coming from the company in the past 10 trading days to justify the rally and the company hasn't repurchased any shares... yet... Volume is a big hint here the volume is almost 7 time average daily volume and its not a short squeeze because there aren't any options trading on DLHC so we are left with three logical explanations.
First Possibility.... An analyst working for a hedge fund stumbled upon the stock and the fund is initiating their position. Since an institution would usually purchase tens of thousands of shares and the stock was so thinly traded a single order could e driving the price up. when I purchased my shares in the beginning of October it took 3 trading days to completely fill my order and I only bought a few thousand shares.
Second Possibility... Similar to what occurs in the options market, (since there are no options trading) A trader is purchasing the stock with some inside information and it has taken more than 10 business days to fill that order.
Third Possibility... numerous investors are very bullish and think the stock would do well for them. I think this is the least likely of the three because of the fact the stock is so thinly traded it acts like an options contract in terms of liquidity and volatility. In my experience there are no coincidences when you see volume spike like that and no clear indication why its usually because somebody knows something...
In either case, whether its an institution or an individual... they more than likely are buying the stock because they believe there is still significant upside from 2 and a quarter... I happen to agree... there still some upside left..
Disclosure: I am long DLHC, .