The Volex (LON:VLX) share price has been heading south over the last few sessions. Currently it is down at around 303p on high volume. Having said that it has appreciated significantly since last summer. I was fortunate to add at around 132p shortly after the prelims in June, since which time it had become my largest holding; however I have recently top sliced in the interest of portfolio management. It is remains one of my largest holdings and I think that over time it will continue to do well under Nat Rothschild.
The reason for the current share price weakness is possibly a combination of profit taking and the meteoric rise of the copper price to which Volex (LON:VLX) is exposed. Yesterday copper was trading at around $8800 per tonne. During the presentation of the interims last November, available at www.investormeetcompany.com Jon Boaden, the CFO stated that Volex (LON:VLX) budgets for copper at around $6000 per tonne, although in fairness he also added that an element of any price increase is passed on to customers. Nonetheless I suspect that this is likely to create some headwinds for the company's margins. A further consideration that may be unsettling the share price is that Volex (LON:VLX) is lining up further acquisitions with the hope of completing at least one by the end of March, according to Nat Rothschild.
These are just my thoughts and very much finger in the wind at that. All constructive views and comments, positive and negative welcome.
All the best.
