Here’s why Urban One (UONE) stock is up 90%

Urban One Inc (NASDAQ:UONE) has seen a volatile year of trading, with the stock reaching a 52 week high of $54.16 and a low of $0.95. The stock rose to popularity in the Robinhood community after UONE rose 2000% over a months period of trading. The media giant, founded by Cathy Hughes aims to tailor their content to the African American community. According to UONE, the company receives 20 million unique visitors and has reached 82% of the African American community. The black lives matter movement had a role to play with UONE’s historic surge. The BLM protest deflected its message into the US market, with investors buying African American owned companies such as Broadway Financial Corporation (BYFC), which surged over 3000%.Today we will breakdown why UONE is up 90% and how the future looks for UONE investors.

Why is Urban one stock up 90%

Unlike other companies which are traded heavily on press release news, UONE is no stranger to market volatility with no news associated. The strong shift in volume over the past 2 days of trading suggest investors and institutions are buying in for value. Between July and August, the company found equilibrium at $14 before plunging below $4 the month after.

With no related news linked to the surge, we can conclude investors have made a move to acquire UONE as it bottomed out at $3.40. From that price, the upside potential is bullish  with average 12 month price targets sitting at $6. Furthermore, the movement towards purchasing more African American owned businesses is likely a contributing factor for the remainder of 2020.

Urban One outlook for investors

Urban one has produced stable revenue returns, averaging $450 million over the past 5 years. However, UONE Q2 results suggested 37% decline in revenue in comparison to 2019 results. Although expected, the poor Q2 earnings will impact the annual results. With an increase in investor interest, the UONE executive management will have a large task ahead to meet shareholder expectations.

“Our cost saving measures remain in place, liquidity is strong with $70 million of cash on the balance sheet, and I firmly believe that Urban One will continue to successfully navigate our way through these unprecedented times.” Alfred C. Liggins III, CEO

We await UONE’s Q3 earnings to assess how they have adapted to the ever changing COVID-19 environment. The UONE stock will likely remain volatile as volumes continue to fluctuate through the remainder of 2020. With minimal price targets from analysts, the long term future of the stock is highly up for debate.

The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

Why has UONE soared over 2000% in the past week?

Urban one’s (NASDAQ: UONE) stock rise is attracting investors from all trading platforms. After exploding 2000% many investors are eager to find out why the bulls owned the chart? Because if there is room to grow in Urban one then investors could potentially profit off unrealistic trading activity.

Table of contents 
1. Why is Urban one's stock rising?
2. Who is Urban One?
3. Is UONE worth investing in?

Why is Urban one stock rising 2000% off no news?

It all started when Hedge Fund Brigade Capital Management sold off its “entire 3.9 million-share stake in Urban on the 11th of June”(Market Watch). Brigade Capital withdraw its position mainly because of Urban’s disappointing financials. Urban one disclosed the sell-off on, triggering a buying spree during Tuesday’s trading. To put the bullish activity into perspective, UONE was the most traded stock on Robinhood. Also, volume for the day was around 45 million, which is astonishing, considering the daily average volume for UONE is about 2 million.

The growing support for black-owned businesses might be contributing to the bulls owning the UONE chart. However, that reason seems to be speculation at the moment.

Overall, there was no fundamental change in Urban one’s business: no new product launch, no new media networks, nothing. In turn,  investors are confused on how a hedge fund selling its position, and the growing support for blacked owned businesses could trigger a 2000% surge.

Who is Urban One?

Urban One only became known to investors a few days ago. However, Urban One, after operating for over 20 years, holds more of a veteran status than just the new kid on the block. Urban One is a media company that strives to deliver urban content to African Americans. UONE provides entertaining, informative, inspiring content to the black community through television, radio, programming, and many more. I would say the UONE successfully achieves its mission as its content reaches 82% of Black America.

Is UONE worth the investment?

Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.

When a stock experiences volcanic eruption, investors often ask themselves, is a pump and dump approaching, should I jump on the train, or should I parachute out and sell? These investment dilemmas are becoming more prevalent. Especially as raging bulls seem to get behind a new NASDAQ stock each week. For example Genius Brands (NASDAQ: GNUS) or Hertz (NASDAQ: HTZ).

Considering there are no fundamental changes in the company, I would hold my horses (opinion, not advice). Expecting that UONE will gap up a third day in a row off no news is a bold claim. Especially as UONE should plummet at the bell as pre-market is down 17.98% (at the time of writing).

Is UONE the next Genius?

Despite the negative investor sentiment the future outlook could be radically different. Just look at GNUS’s 2634% stock growth. There were countless times when GNUS propped up, dipped, and then surged straight after. Thus, the sell-off at the bell could provide a possible entry. However, I would only invest if I believed there was an incentive to buy. Honestly, because UONE remains fundamentally unchanged, I cannot see an incentive to buy.

All in all, if you decide to invest in UONE make sure you can answer the following two questions. Why am I investing, and why is everyone else investing? Because if you cannot answer either question, then the investment is likely not viable and you will be caught in a pump, and dump trap.

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The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

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Written by Patrick McLoughlin, Senior Manager of YIG.