Share price movements often appear irrational and sometimes are, which creates an investment opportunity or pitfall, depending on one's point of view The opportunity to acquire stock at a lower price or the pitfall of buying stock when 'negative' news is in the offing or selling a good share because of short term price fluctuations. The share price of K3C has fallen somewhere in excess of 12% in the last week or so, which given the very positive trading update on 15th June is a little perplexing. Currently the shares are at about 320p versus 375p or thereabouts on the day after the update.
Admittedly the shares are not a bargain on a current multiple of 20 or thereabouts, but neither do I consider them expensive given the trading performance and various investment metrics. The company is financially well resourced and senior management have significant holdings. John Rigby, the CEO holds over 10% of the equity. It may be that an acquisition is in the pipeline that will require the issue of new shares. I have a reasonable holding, having being fortunate to buy when the stock price was depressed. I don't operate a stop loss approach as it doesn't fit with my investment approach, although I appreciate that many do. Had I done so I may well have been stopped out by the recent falls.
Any thoughts or views on the company and the recent share price volatility are welcome.
All the best
