Heavy selling depresses Big Treat despite earnings growth of 40%
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The stock which opened at N14.00 closed the day at N13.65 as investors continued to drop the shares on plans by the Securities and Exchange Commission (SEC) to probe price manipulations in the market.
The company reported that turnover for the period stood at N2.045 billion as against N1.55 billion in the corresponding period of 2006. Profit after tax was N183 million compared with N131 million in 2006.
But dealers who came to the market with 11.047 million shares had to succumb to bargain hunting from 75 new buyers.
The company which was listed on the NSE on December 7, 2007 at N2.85k, had 41 days of uninterrupted uptrend closing at N20.69k on February 7, 2008. The closing price of N20.69k represented an increase of N17.69k, or 589.7% compared to the listed price.
Analysts had submitted that the precipitous rise was due primarily to very thin float.
“From the listing of the stock on December 6, 2007 through February 5, 2008, the trading volume was under 500,000 units daily. As the trading volume increased, the stock price began to decline.
The first decline in price on February 8, was on trading volume of over one million shares indicating a temporary halt in the stock’s uptrend”.
The evidence of panic selling by some investors in the stock is beginning to surface. In the most recent 5 trading days, 34 million shares changed hands averaging 6.8 million shares daily.
Analysts at proshare news observed that during the last 3 trading days, the stock has tried to halt the downtrend, but has been met with very strong selling pressure.
“Analyzing the stock from the Japanese candlestick perspective, the trading pattern for the last three days were “Graveyard Dojis”.
Graveyard doji occurs when the opening price, lowest price and closing price of the day are all the same. The significance of the graveyard doji is that at the beginning of trading, buyers stepped in and took control, driving the price up, but before the close, sellers took control and drove the price back down to the opening price.
Although, the graveyard doji indicates a failed rally, the intraday high provides evidence of some buying pressure.
“My comfort entry price is at N11.77k, representing 50% retracement of the recent gains. If the current downtrend continues, it will take 4 successive days of losing 5% daily to reach the 50% target. However, it will indicate a serious problem for the stock and probably exacerbate the downtrend”, says one of the analysts.
The company reported that turnover for the period stood at N2.045 billion as against N1.55 billion in the corresponding period of 2006. Profit after tax was N183 million compared with N131 million in 2006.
But dealers who came to the market with 11.047 million shares had to succumb to bargain hunting from 75 new buyers.
The company which was listed on the NSE on December 7, 2007 at N2.85k, had 41 days of uninterrupted uptrend closing at N20.69k on February 7, 2008. The closing price of N20.69k represented an increase of N17.69k, or 589.7% compared to the listed price.
Analysts had submitted that the precipitous rise was due primarily to very thin float.
“From the listing of the stock on December 6, 2007 through February 5, 2008, the trading volume was under 500,000 units daily. As the trading volume increased, the stock price began to decline.
The first decline in price on February 8, was on trading volume of over one million shares indicating a temporary halt in the stock’s uptrend”.
The evidence of panic selling by some investors in the stock is beginning to surface. In the most recent 5 trading days, 34 million shares changed hands averaging 6.8 million shares daily.
Analysts at proshare news observed that during the last 3 trading days, the stock has tried to halt the downtrend, but has been met with very strong selling pressure.
“Analyzing the stock from the Japanese candlestick perspective, the trading pattern for the last three days were “Graveyard Dojis”.
Graveyard doji occurs when the opening price, lowest price and closing price of the day are all the same. The significance of the graveyard doji is that at the beginning of trading, buyers stepped in and took control, driving the price up, but before the close, sellers took control and drove the price back down to the opening price.
Although, the graveyard doji indicates a failed rally, the intraday high provides evidence of some buying pressure.
“My comfort entry price is at N11.77k, representing 50% retracement of the recent gains. If the current downtrend continues, it will take 4 successive days of losing 5% daily to reach the 50% target. However, it will indicate a serious problem for the stock and probably exacerbate the downtrend”, says one of the analysts.
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