I like to keep up with a lot of the companies I've looked at and decided against on the blog. It's a bit of a masochistic habit - it doesn't take long in investing to realise that one throws away a lot of companies which go on to shoot up in price (and lots which go on to bomb and would have lost us a fortune, but we tend to not be wired to have such a generously perspicacious perspective), and I feel a little pang of pain when I see that a company which I thought was 'quite interesting' has since doubled. There's two facets to that pain; the irrational bit, which bemoans myself for not investing, and the logical bit, which bemoans the shortening of my pool of potential investments, since it's probably now even further out of my interest range. Lots of the companies I look at go the other way, though - they either hover ambivalently or continue to drop in price (not unlikely, since I'm tending to look for shares which are misunderstood or in 'trouble' in one sense of another). This is where it gets really interesting. Price falls are big buying opportunities if the fundamentals haven't changed. If the fundamentals have changed, they're a chance to catch back up and reassess - maybe the fall is overdone.
I'll begin by saying, then, that Quercus Publishing (OFEX:QUPP) were interesting to me only a few weeks ago. They're a company I'd looked at before; for background reading, check out my both my first post in June and my more recent in October. In the sense that I was considering investing, then, it's been quite a fortuitous escape; the book publisher posted a dire announcement last week with their preliminary take on full-year figures. That stood in stark contrast to Bloomsbury's strong trading statement on the 16th - with turnover there up 20%. Brief 'highlights' for QUPP:
- UK book trade has continued to be challenging... sales in the final quarter were lower than expected, due in part to continuing issues within the book trade which led retailers to adopt very conservative ordering policies and a lower than expected upturn in digital sales over the Christmas period...
- ...the Directors expect the Company to make a significant trading loss for the financial year.
- The…
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