SSX smorgon steel group limited.

profit downgrade followed by strong buying

  1. 5,154 Posts.
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    Interesting to see the market activity post the market update by the company on 9 May. The announcement was put out there as a profit warning/ earnings downgrade which, upon further reading, is merely a note to the market that the top end of analysts forecasts would not be reached for the 2nd half results.

    That being said, they still make a solid profit and a solid improvement on first half and last years numbers. So the point of the announcement was what???

    It served to drop the price by close to 10% and shake out a number of investors.

    Then, on the 14 May, the same company commenced a round of road shows to analysts/ instos etc. Upon reading the investor presentation pack it is clear that the outlook for the next 12 months is great for SSX. They have had some delays in getting orders delivered which will ultimatley show up as future revenues.

    The interesting thing for me has been the solid volumes over the past week that has seen consistant, if unspectacular, daily gains. This increase in average trading volume clearly looks like some solid accumulation, given the likes of Macquarie and ABN Amro have now got buy recommendations on the stock, with Macquarie putting a valuation of $1.51 per share on SSX.

    I don't know about you, but I am following the smart money!!!
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