Here's why Gage Roads Brewing Co Limited surged 18% today

Gage Roads Brewing Co Limited (ASX:GRB) exploded early in the session.

a woman

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Shares of small-cap Australian brewer Gage Roads Brewing Co Limited (ASX: GRB) have shot 18% higher this morning to be trading at 5.9 cents. That compares to a 0.2% decline for the ALL ORDINARIES (Index: ^AXAO) (ASX: XAO) for the morning.

So what: Although Gage Roads did not release any news to specifically explain the jump, it's likely that investors are piling back into the stock following a heavy sell-down of its shares recently. Gage Roads shares fell 37.5% during March while they have fallen 66.7% since the beginning of the year, having traded at 15 cents per share at the time.

In its most recent quarterly earnings report, Gage Roads said that sales had fallen in its two segments, being contract brewing and proprietary brand brewing. The latter declined by 19%, largely as a result of lower sales through its major customer Woolworths Limited (ASX: WOW). Meanwhile, the company also said that it expected lower volumes in the current half.

Now What: Following a rough 12 months for the stock, it seems that investors are now seeing good value at its current price tag. Still, Gage Roads Brewing is not a stock for the faint hearted and should be avoided by investors who take a more risk-averse approach to building their wealth.

Ryan Newman has no position in any stocks mentioned. The Motley Fool 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.

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