Houston Wire & Cable’s stock illustrates folly of daily trading

In the days leading up to Houston Wire & Cable’s planned
March 15 announcement of its Q4 and full-year 2011 results, the price of the
company’s ran up above the $15 mark, according to Yahoo! Finance. 

Expectations were for good news. Houston Wire & Cable’s stock
closed out 2011 at $13.82, and closed at $10.59 as late as Nov. 29, 2011.

Above: 5-day stock chart of Houston Wire & Cable

Then the company announced 2011 sales were up 28.5%, to $396
million. Q4 sales of $87.5 million, however, were down 6.5%.

Immediate short-term result—Houston Wire & Cable stock
traded at a low of $12.91 after the morning announcement. From the $15.20 high
on March 12, that’s a 15% drop.

On Friday, March 16, the stock closed at $14.80. That’s above
the year-end 2011 closing price, and up nine cents on the week.

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