In September 28, 2020, COL Financial (COL) hit an all-time high of 27 a share. COL has been soaring since it hit a low of 14.90 a share at the height of the COVID-19 pandemic lockdowns.
At the height of the lockdowns, Bloomberg made a report that there has been a surge in retail brokerage account activation in the country and COL Financial has been one of the beneficiaries of that surge.
Many investors saw COL Financial as a resilient company as the stock market continues to open and trade even in during the lockdowns.
The appearance of resiliency of COL, made the market value COL at a premium. At its current price levels, COL has a price/earnings (PE) ratio of 36.71x and a price to book value ratio of 8.02x.
COL Financial at a valuation never seen before, has tempted its significant investors to cash out and reap the gains. On October 6, 2020 investors/holders of COL Financial at affiliate Citisecurities Inc. unload around 3,000,000 COL shares. Volume on that day was around 30x the 65-day trading volume of COL shares. On the following day, October 7, 2020 another 1,000,000 COL shares were also unloaded by COL investors keeping accounts at affiliate Citisecurities Inc. The volume on that day would be around 10x the 65-day average trading volume of COL shares.
If those significant investors have seen the never seen before valuation of COL Financial as a never seen before opportunity to cash out, then why should you not?
If COL Financial takes advantage of its all-time high valuations by making a stock rights offering or a follow-on offering to raise funds to bolster further its capital and further improve, enhance and innovate its platform to match-up the best in the world then COL should be worth holding on. Recently, COL has experienced several slowdowns in its platform. Failure to innovate and step up could erode its advantage overtime. Start-up Investagrams.com although not yet a stock brokerage is surging in popularity among retail traders and investors. If investagrams.com becomes a full online stock brokerage, COL’s dominance might just evaporate.
Disclaimer and Disclosure: This is an independent analysis for discussion purposes with the aim of giving stock traders and investors an independent view point. Accuretti Systems Inc. in the course of day to day trading may have own, or is considering buying or disposing, the shares of the companies mentioned in this commentary.
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