Mr Market strikes again or can anybody pls explain?

[jkool]

Watching some market action lately I was a little bit surprised seeing the movements in two of the stocks I follow. As I don't really understand what exactly happened, I hope somebody with more insight here on ASF will be able to enlighten me.

1. BKL released a the profit data for the third quarter recently. Company seem to be running smoothly and profits just keep rolling in. Yet since the news hit the market BKL share price is pretty much flat or even slightly retreating.
Why is that?

2. NAM (major aussie cotton grower) is a similar story. Sure the profits little lower than last year but company is still easily in black (same cant be said about lots of others in the industry), they do have a huge market share so should withstand the short term struggle. Yet the market now values it about 20-30% below its NTA alone hence completelly disregarding its market position and existing earning power.
What am I missing?

And I do have the full story Mr Market strikes again on my blog if anyone needs more info.

Cheers

 

[Wysiwyg]

Compare your share prices to WMT. They haven`t even got their hands dirty yet.

No rhyme or reason matey....the majority disagree with me on stock pricing too.:kebab

 

[Out Too Soon]

The market may have already factored in BKLs success, really wysiwyg is right, who can fathom Mr Market. For instance Tech Analysis shouldn't work better than Fundamentals but it does (Don't tell Kennas & co I said that )

Nam, why invest in an evil aussie cotton grower? there are so many more ethical co.s to invest in (Uranium mines, coal mines), sometimes investors ignore a stock for ethical reasons, out of place as that may seem. (logging native forest is another one.)

 

[Buffettology]

The market may have already factored in BKLs success

I agree with this point.

As for point 2, it is undervalued, I valued it at around 73c per share. No idea about the company though, but if there are no signs of negative impact on future earnings, then I think its just Mr Market upto his usual thing.

 

[Smurf1976]

Nam, why invest in an evil aussie cotton grower?

Ignoring the ethical side, I think one issue is that most people in this country probably think the entire cotton industry has been wrecked (or is about to be) by the drought. They're not looking at facts on the company - they just see the stories on the news and the pictures of empty dams, cracking ground etc and assume any company involved in the industry will be affected.

 

[jammin]

Jkool, as already stated by Out too soon and Buffettology the good news is already factored into the SP. IMHO the old saying "Buy on the rumour, sell on the fact" tells us what Mr market is doing.
Regarding a cotton producer... wash your mouth out with soap. Aren't all those cotton companies the ones taking every last drop of water from the Murray/Darling river system. Those bastards.
I think Smurf is correct. All the negative publicity for cotton as an industry, whether it's drought/water allocations/use of chemicals; is going to reduce the number of prospective stock buyers thus reduce demand for shares.
Now if you could get the pulic to understand that cotton is the miracle solution to global warming, I think the SP might be a bit higher.