Good morning!
Judges Scientific (LON:JDG)
I've been sceptical about the valuation of Judges shares for a while, and on 24 Jan 2014 my conclusion here was, "it's been an amazing ride for shareholders, but with growth now much harder to bolt on, due to the enlarged size of the group, and a very rich valuation, if it was me, I would say thank you very much indeed, bank my profits, and move on. Each to their own of course!". So I hope readers did bank some profits.
This is one of many highly-rated (in PER terms) shares that has been under pressure since the high point of the small cap market in Mar 2014. As you can see from the chart below, it peaked several times at around 2375p in Feb-Mar this year, before lurching down to just over the 2000p level in late Apr 2014.
There were no trading updates or accounts published at that time, so it was unclear what triggered the fall, other than the general sell-off in small caps - the FTSE Intl-aim All Share Index (FTSE:AXX) has dropped 14% from its peak in the spring, so most small caps have been under selling pressure since then, some considerably - especially the more speculative and highly rated stuff.
Further recent falls have reached a crescendo today in a savage move down this morning on publication of a profit warning. As profit warnings go, it's not a disaster, and WH Ireland has this morning lowered its EPS forecast for this year from about 96p to 86p.
In my opinion it's starting to look interesting at the current price, so I picked up a small slice of shares bang on the low point this morning at 1240p, which was a stroke of luck, as it's bounced quite well so far, so I chopped them out again at 1390p. Who said never catch a falling knife?! I remain of the view that profit warnings are currently one of the few times you (selectively) get a chance to buy quality companies at a bargain price.
Also there is often a short term trading opportunity early on, as stop losses are triggered with the spread betters, and stock is dumped at any price, before the punters liquidate other positions to…
