RAM Energy: Pump Up The Volume

TULSA, Okla. (TheStreet) -- RAM Energy Resources (RAME Quote) was trading sharply higher on a surge in volume after an analyst initiated coverage of the oil company and assigned a stock price target that represents 148% of upside from Wednesday's closing price.

Rodman & Renshaw initiated coverage of RAM Energy with a market perform rating and a stock price target of $3 based on valuation. The firm said RAM Energy's stock represents a compelling value at current levels as it is trading at only 0.5 times its proved-only net asset value, or NAV. Based on Wednesday's closing price of $1.21, Rodman & Renshaw's $3 target shows the firm expects significant upside for shares.

News of the analyst move had RAM Energy shares rallying sharply higher on big volume. RAM Energy was lately rising 35 cents, or 28.9%, to $1.56, making it one of the Nasdaq's top performers Thursday. Earlier in the session, the stock touched an intraday high of $1.96.

More than 2.5 million shares changed hands in the first two hours of trading Thursday, compared to the stock's 50-day average daily volume of 299,875, according to the Nasdaq. RAM Energy has a 54.7 million-share float with a small short interest float of only 0.2% as of Sept. 10, according to Yahoo! Finance. More than 34% of the company's shares are held by insiders with another 35% owned by institutions.

On Tuesday, RAM Energy disclosed that it had received a letter from the Nasdaq saying that it had regained compliance with the exchange's minimum bid price listing requirements. On Sept. 15, RAM had received a minimum bid notice from the Nasdaq after the company's stock had closed below $1 per share for 30 consecutive business days.

Buy-and-hold investor posts on Internet message boards said they want to see the stock top Rodman & Renshaw's price target of $3 before they sell, with some saying the minimum floor for RAM shares is $2.50. Other traders argued that while the company's stock was undervalued, the near 30% run Thursday was puzzling, especially on a down day for the equity markets as a whole.

Read more about today's high-volume stocks like Chelsea Therapeutics in earlier "Pump Up the Volume" posts.

-- Written by Robert Holmes in New York.