Eltek Ltd (ELTK Stock Report) is one of the top penny stocks of the week. The stock has given a solid profit to many who follow penny stocks. Shares of ELTK are up almost 550% in the past few sessions from $1.64 to as high as $11.56 (see: 5 Penny Stocks To Watch That Just Made New Highs This Month)
Electric power conversion is a burgeoning industry and one of the interesting companies in this sector is Eltek Ltd in Norway. Eltek is engaged in manufacturing and marketing of electric power conversion systems all across the globe. Over the years, it has found clients from a range of industries like manufacturing and telecommunication. As of 2018, the company has developed its presence in as many as 40 countries and has employee strength of 2000.
Why Such A Big Jump For This Penny Stock?
The reason why Eltek is in the news this week is due to its remarkable gain in the stock market on Wednesday and Thursday. This happened after it announced its earnings. In Wednesday’s session, the company’s shares soared 326% on massive volume.
Although the latest gains are certainly a positive for the company, it is also important to keep in mind that the Eltek stock has also gone through wild declines in the not too distant past. The primary reason for those declines was due to investor concerns about the company’s profitability.
That being said, the stock’s poor performance was also perhaps the reason why the stock experienced such a move on Wednesday. The marked improvement in the company’s earnings and fundamentals was the primary trigger beyond the move.
Penny Stock Earnings
The big news about the earning for Q1 2019 has been the fact that the company grew its profits from the year-ago period. While revenues for the quarter stood at $8.7 million, the profit margins rose by 17.6% as opposed to a growth of 5% in the year-ago period. Eltek generated operating profits of $433,000, while the net profit came in at $243,000. The earnings per share for the period stood at 12 cents a share.
For long, the Elket management had stated that they are working toward a turnaround for the company. The latest earnings show that those were not empty words. However, investors will be looking forward to whether the company can sustain such profitability and if it continues to do so, then it could be a good turnaround story.