Yesterday, Resource America, Inc. (NASDAQ:REXI)
started the high move. After the negative price change, the stock gained
over 15% on its price and over 337 thousand shares were sold. Obviously, REXI started to climb up, though the future of the stock cannot be predicted yet.
It turns out that the most reasonable explanation for the high trade is the recent news released by the company. According to it, REXI has just closed its securitization transaction, which ensured it approximately $175 million of leases and the team is highly satisfied with its new investors. As soon as the announcement was made, REXI started the climb.
Resource America, Inc. is a specialized asset management company using industry specific expertise to generate and administer investment opportunities for its own account and for outside investors. Over the past six months, the stock price has moved higher, though after April this year, it had a downtrend. In July, the price started to climb up again, however, today the high trade was broken.
At the beginning of this month, REXI reported its operating results for the third fiscal quarter of 2010. According to them, the company reported a loss from continuing operations attributable to common shareholders of $5.3 million, or $0.28 per common share-diluted, which is higher than the previous period.
The President and CEO of the company, Mr Jonathan Cohen, claimed that REXI has incurred a non-cash charge in selling the leasing portfolio, which has enabled it to reduce its balance sheet borrowings by almost 70%. Cohen said that without this non-cash charge, REXI would have returned to profitability, while the stockholders' equity has totaled $138 million.
REXI still has more assets than liabilities on its balance sheet, however, the company still should cover its net losses and operating expenses.
Statistics shows that REXI was trading above the 50-day moving average and higher than the 200-day moving average, though the stock is currently falling down again.