Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Not six months ago, I took a look at a little oil exploration play that Wall Street traders had recently been buying, hand over fist. Its name was Global GeoPhysical Services
So what: Did you listen? I sure hope you did, because Global Geo is up 72% from the price at which I spotted it, including a 10% leap higher that happened just today (now subsided to just a 7% rise).
Now what: So far as I can tell, there's no good reason for today's price spike in particular. The company put out a press release mentioning that it's added a couple oil execs to its board of directors, which now includes representatives from Apache
More importantly, though, the long-term argument in favor of buying this stock remains intact. At last report, Global Geo was still churning out free cash flow at the rate of $101 million per year. The resulting valuation of 6.4 times free cash flow tells me there's every reason to buy the stock today -- and every chance of it continuing to go up in the future.
Maybe Rich was lucky, recommending Global Geo all those months ago -- but is he tempting fate by doubling down on that bet after a 72% gain? Add Global Geophysical to your watchlist, and watch how this plays out.