Zomedica (NYSEMKT: ZOM) has been one of the hottest stocks of 2021, soaring more than 340% this year and dwarfing the
S&P 500 and its 10% gains in the process. At one point it was up more than 900%, but it has been losing steam of late. With such extreme volatility in less than four months, this is a stock that investors should be careful with and take a closer look at before making an investment decision.
Below, I'll look at what has been driving the stock's price this year and assess whether Zomedica is just another meme stock benefiting from a rise in internet fame, or if it is an investment that is actually suitable for your portfolio.
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Why are investors so bullish on Zomedica?
Shares of Zomedica started picking up steam early in the year, when the company announced on Jan. 4 that it had a new CEO (Robert Cohen) and that its Truforma platform was close to launching. That day, more than 400,000 shares of the stock changed hands. Previously, it wasn't all that common for the stock's daily trading volumes to rise above 100,000.
The popularity would continue rising and reach a peak of just under 1.1 million shares on Jan. 11 -- even though there wasn't any groundbreaking news on the day to justify such a movement. That suggests there has been some speculation involved in the stock's impressive rally this year.