MENU

Why shares of Nearmap Ltd have exploded this week

You may have seen Nearmap Ltd (ASX: NEA) shares were among the market’s most explosive performers during Tuesday’s session on the ASX.

They rose an astonishing 28.9%, closing at a high price of 91.5 cents. That’s almost triple their 52-week low of just 32.5 cents – struck in February this year – with the vast majority of that share price appreciation coming since late in June. Its shares have given back almost 5% today, although they still trade on an 87 cent price tag.

Nearmap is a relatively small business that provides aerial imaging technology in both Australia and the United States. These services are provided to a wide range of customers spanning various industries, such as architecture and engineering, construction, insurance, rail, property and roofing, as well as government sectors.

An announcement from Nearmap to the market yesterday acted as the catalyst for the impressive rally. Updating the market on its activity for the first quarter of financial year 2017 (FY17) it said it had enjoyed the largest US sales quarter to date (it now has over 400 customers in that country). It also experienced continued growth in the Australian business, while adding TomTom to its customer base in the United States to complement its subscription in Australia.

Here’s the chart that created so much hype among investors on Tuesday:

Source: Nearmap

Source: Nearmap

Although Nearmap is creating exctiment in its market, investors do need to be cautious. Nearmap is still a somewhat risky investment proposition, although yesterday’s results were certainly encouraging for shareholders.

Discover How 1 Man Made 100x His Money After 50

Few know, that as Warren Buffett blew out the candles on his 50th birthday cake, he had just 1% of his current fortune. Think about it: At an age when most give up hope, Buffett was just getting started on the remaining 99% of his fortune. Goes to show you that it's never too late for you to potentially get rich. Which is why we've gathered the strategies we learned from Buffett, distilled them down to 11 simple lessons, and put it in an exclusive report for you to claim. Just click here to learn more about this handy investing guide.

Motley Fool contributor Ryan Newman has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.