I waited until after JONE released its full year guidance for 2017 before issuing our buy alert on February 23, believing that would remove most of the near-term risk in the stock. Turns out I was wrong about that, as its share price dropped more than 10% the following week. Even for an inexpensive stock like JONE, that degree of volatility is unusual in the absence of any news.

Nothing has been divulged by the company since then to explain its rapid fall down the charts, so presumably one of its large shareholders got cold feet waiting for the company to release its second quarter results on March 6. However, at the same time there has been a lot of activity in the JONE call option with a March 17 expiration date and $5 strike price so clearly there are mixed opinions as which way this one is going to turn.

I don’t know if next week’s earnings report will turn out to be a gusher or a dry hole, but if the news is good then we could see a very quick turnaround in this holding. JONE is frequently the subject of takeover talk due to its small market cap ($183 million) and leasehold rights to some of the most productive oil fields in the U.S., so excess volatility is not unusual in this stock.