As part of a test on the release of micro-cap articles on Seeking Alpha the following CSI Compressco (CCLP) related articles were released.
- "Is Green Hydrogen Part Of The End Game For The Spartan Energy - CSI Compressco Deal?" (CCLP article)
- "Midstream Companies And The Fuel Of The Future"
An article on a name like CCLP would typically garner very little attention due to its small size and obscurity. We therefore rarely release them publicly even though we find the analysis very useful for our own investments and those of Cash Flow Kingdom 'CFK' members.
Most views of public articles occur on day one, then typically falling off to inconsequential by day 3. However, here by publishing a second article designed to be more popular "Midstream Companies And The Fuel Of The Future", which also directed the reader to the initial CCLP article, we hoped to drive more awareness.
CCLP article views:
- 3 days after public article release of "Is Green Hydrogen Part Of The End Game For The Spartan Energy - CSI Compressco Deal?": 1,112 (very low, our average per article is 20,658)
- 3 days after public release of "The Fuel of the Future": 1,939 (still quite low, but an improvement. Note the Fuel of the Future viewership was also below normal, 8,969 views)
CCLP stock price:
- After publication of the Spartan/CCLP press release and immediately before publication of CCLP article behind the Cash Flow Kingdom 'CFK' paywall: $1.18
- After Cash Flow Kingdom publication of the CCLP article behind the 'CFK' paywall: $1.81
- After public release of the CCLP article public on Seeking Alpha: $1.80
- After public release of "The Fuel of the Future": $2.12
Analysis of Views, Followers and Membership:
As usual the public release of the CCLP article wasn't very popular and didn't do much from our viewership, following or new member acquisition. Once the more popular "The Fuel of the Future" article came out directing investors interested in Hydrogen to the more obscure CCLP views went up, but were still pretty minimal. The test was relatively unsuccessful in encouraging more readership of the article on the micro-cap name.
Analysis of Stock Price Movements:
The price of CCLP stock didn't do much immediately after the Spartan/CCLP press release was put out indicating few took note of it. It's only after we released our analysis of the deal behind the paywall that CCLP's rose over 50%.
This may be because it focused attention on the stock with those most interested and able to take advantage of the opportunity. Wall Street cannot invest in CCLP due to its low market cap. Most individuals are also not interested in the name due to the firm being in a "boring" field and having a low dividend. Cash Flow Kingdom members however are typically active, well-heeled, individual investors and hedge funds with significant interest in whatever we cover. They are more likely to read and pay attention to what we cover because they pay to do so. Additionally as we have seen in the past, when CFK members see a compelling opportunity, they can and do move the price of small obscure stocks such as CCLP.
Likewise, the CCLP's stock price didn't move much when we released the CCLP article publicly on Seeking Alpha. Again this is a small, obscure stock so the article got little readership and attention. New non-CFK people who purchased the stock were probably also offset by CFK members who saw the release as an opportunity to cash out their profits.
The price of CCLP did however rise further to $2.12 after the "Hydrogen: Fuel of the Future" article was released (eventually achieving an intraday high of $2.35). I suspect a large portion of those who read the initial CCLP article public release, only did so casually, quickly determining it wasn't the type of opportunity they were interested in (not large cap, not well-known or interesting subject, not a significant dividend payer). The second "hydrogen article" release may have brought a group of investors more interested and focused on buying hydrogen names. In other words, investors specifically interested in hydrogen plays became aware of CCLPs potential hydrogen tie in for the first time.
Now, a couple weeks since publication that price has subsequently fallen back to $1.94. This is 18% less than the $2.35 peak, but 64% higher than the day before "Is Green Hydrogen Part Of The End Game For The Spartan Energy - CSI Compressco Deal?" was first released behind the CFK paywall.
Releasing analysis in the right place in order to target the right type of investor is key (active individual investors willing to buy micro-caps were the target market in this case).
- Public release of micro-cap articles has little value for increasing viewership, followers or members.
- These articles however can still significantly affect micro-cap stock price even when they generate relatively few views. This is probably because of their thinly traded nature. We assume but have no proof that this means they are more highly valued by the few who do pay attention to the article than the typical "me too Tesla article", or "5 dividend stocks that ... article".
- In particular it is apparent that members willing to pay for additional marketplace analysis value these type of articles more than the general Seeking Alpha public, and Seeking Alpha readers may also value it a bit more than the general public. The price of CCLP stock went up much more following the combination of the two Seeking Alpha articles, than it did following the company press releases.
- This has implications for how small and micro-cap firms can best "get the word out" about their developments.
From Cash Flow Kingdom's point of view, we find micro and small cap analysis is great for making profitable investments and retaining members behind the paywall. However, their public release is of questionable value to gaining new members.
Analyst's Disclosure: I am/we are long CCLP.
This article covers a risky micro-cap investment. We do not know your goals, risk tolerance, or particular situation; therefore, we cannot recommend any specific investment to you. Please do your own additional due diligence.
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