Moving Markets in Microcaps

Sometimes a large investor makes their presence known and it becomes fairly obvious who is causing a stock to move. This is particularly true in microcaps. So when the price of Noble Roman’s (OTC BB: NROM) stock jumped up 46% a week ago, it was not too hard to figure out that it was largely because of one large individual investor buying a chunk (although my initial guess was completely wrong). How do I know? He just filed a form 13G with the SEC, indicating that he now owns 10% of Noble Roman’s.

That buyer was none other than Robert P. Stiller, chairman of the board of Green Mountain Coffee [[gmcr]] (and for those old hippies out there, founder of E-Z Wider). Bob has owned the stock of Noble Roman’s since early in the spring of 2007. See his 13G filing on March 6, 2007, where he stated that he owns 1,000,000 shares. He increased that earlier this month to just under 2,000,000 shares. Green Mountain has a $900 million market cap. What does Bob want with a $40 million pizza company? And should anybody follow his example? That is the $4 million dollar question (for Bob at least).

So far, Bob has not done well on his Noble Roman’s investment. His average price on the earlier purchases in February and March 2007 was probably around $4.15. At a recent stock price of $2.40, he has lost 43%.

Microcaps will often see random individuals that buy large stakes. Sometimes the large investors are right, sometimes not. In this case, like with others, only time will tell.

Disclosure: I am short NROM. I have a disclosure policy.

0 thoughts on “Moving Markets in Microcaps”

  1. Hello. I am currently long UPZS.PK. I was doing some research on it and saw that Roman is in the industry and then followed a link to SA and read your article. UPZS has a larger franchise fee and higher royalties than Roman.
    Which in regards to your article should be somewhat of a plus for UPZS.
    Do you have any thoughts on UPZS? Or suggestions on how to value it?

    Thanks
    Nixon

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