The Australian Primary Hemp Ltd (ASX: APH) share price had an incredible start to the trading day this morning.
The company's shares closed at 38 cents a share yesterday afternoon, and opened at the same price this morning. However, the Primary Hemp share price took off soon after, rising as high as 52 cents a share just before 11 am. That rise represents a gain of 40% on the opening price.
Primary Hemp shares have cooled off somewhat since, and are trading at 39 cents a share at the time of writing, up a still-respectable 4%. The current share price puts Australian Primary Hemp shares close to 130% up year to date.
So what is this seemingly volatile company? And why are the shares going gangbusters today?
What is Australian Primary Hemp?
As you might have imagined, Australian Primary Hemp is one of Australia's largest producers of home-grown hemp. If you aren't familiar with hemp, it is a plant in the cannabis genus. However (before you call the police on this company), note that hemp does not meaningfully produce the psychoactive chemicals as its illicit botanical cousins do. As such, hemp plants have been legalised in Australia for commercial purposes since 2017.
The Hemp plant produces fibres in a similar vein to cotton plants, which make it a good source of clothing materials and similar applications, such as rope making.
But Australian Primary Hemp instead focuses on the nutritional benefits of hemp, of which there are apparently many. The company tells us that hemp is a plentiful source of protein, dietary fibre, amino acids, omega 3 and 6 and magnesium, amongst other nutrients.
Australian Primary Hemp is especially focused on the use of the hemp seed, stating that, "this super seed contains the essential nutrients, vitamins and minerals for human function and has long been recognised for its nutritious value as one of China's five ancient grains".
The company sells a range of hemp-derived products under the Australian Primary Hemp brand. These include hemp oil, hemp protein powder, hemp flour, and unprocessed hemp seeds. It even sells hemp-based hand sanitiser. It also markets these products, as well as a range of snack bars, under a premium 'Mt. Elephant' brand.
Why is the share price blazing new highs today?
The cause of today's wild share market performance on the Australian Primary Hemp share price is not immediately obvious. There have been no price-sensitive announcements made to the ASX in December at all so far, with the last update coming out almost 3 weeks ago on 20 November.
It is worth noting that this announcement outlined a very positive development for the company. It discussed how Mt. Elephant products are soon to be stocked in 7-11 convenience stores around the country, which was announced a few days earlier.
However, if we dig a little deeper on today's market moves, something interesting comes to light. ASX data shows that this company's average trading volume is 12,831 shares per day. However, on this particular day, 586,712 shares have changed hands. And that's with some hours left as well.
ASX data shows that a significant chunk of the company's shares (around 40,000) were bought this morning just after open, and an even bigger chunk (close to 60,000) were offloaded soon after. The data also shows significant selling dominating over the rest of the day so far.
Small-cap shares like this one can be vulnerable to large buy or sell orders in terms of volatility. Could this be behind the massive swings we have seen in the Australia Primary Hemp share price today?
