Shares of CPI Aerostructures Inc. soared Monday after the aerospace contractor announced that its stock would resume trading on the NYSE American exchange this week.
The stock rose 40.5% to close Monday at $1.70 in over-the-counter trading. In a filing after Friday's stock market close, CPI Aero said its stock would trade on the NYSE American exchange under its former ticker, "CVU," an aviation acronym for ceiling and visibility unlimited.
In May, the Edgewood company received a delisting notice from NYSE American LLC related to its failure to file timely financial statements with the Securities and Exchange Commission.
After the exchange announced it was suspending trading in the stock, CPI Aero moved the security to the OTC Pink Limited Information market tier operated by OTC Markets Group Inc.
On Friday, the maker of structural assemblies for the A-10 Thunderbolt ground attack jet and the F-16 fighter jet filed results for the second quarter of 2022, bringing the company's financial filings up to date.
"The company believes the filing of this form 10Q will resolve the condition that led to NYSE American suspending trading in the company's common stock," Dorith Hakim, CPI Aero's president and chief executive, said in a statement.
The company reported second quarter net income of $500,000 on revenue of $18.9 million. That compared to net income of $600,000 on revenue of $22.3 million in the 2021 period. The company had an order backlog of $504 million as of June 30, Hakim said.
Joseph Favorito, founder and managing partner of Melville-based Landmark Wealth Management LLC, said that micro-capitalization securities that trade on over-the-counter markets don't have the same credibility as companies on major exchanges.
"Penny stocks are not subject to the same degree of regulation as those on the NYSE or Nasdaq," he said. "The larger entities tend to have a higher degree of regulatory disclosure."
The NYSE American exchange, formerly known as the American Stock Exchange, caters to smaller companies than its sister exchange, The New York Stock Exchange, which is home to many components of the Dow Jones Industrial Average.
Even after Monday's rally, CPI Aero's stock remains far off its 52-week high of $3.45 reached in March.