Why are some stocks oversold?

[Eager]

I hold an amount of BKN, having accumulated them over the past year or two. A former darling several times over that have always paid good dividends and realised a solid capital gain. I fully realise that this is not a guarantee of future returns, but I have always viewed them as a junior bluechip with their house in order who happen to have risen to a point several times over the past decade where I have cashed in, then bought back later at a more reasonable price. I am not particulary worried about their price at the moment but I find it frustrating that they appear to be grossly oversold!

Solid company, check. Great yield, check. Low P/E, check. Good forecast, check. But, at today's close, only 29 buyers are after 40,000 shares but 45 sellers want to offload 108,000 shares, and their share price has crashed 40% in the past 2-and-a-bit months.

Why?????????? Meanwhile, investors all around the place are looking for worthwhile places to park their money. Are people solely interested in the short term nowadays?

Hopefully this doesn't sound like a ramp. It is not intended to be, since I have no intention of selling anytime soon. In fact I might buy some more...

 

[CanOz]

I hold an amount of BKN, having accumulated them over the past year or two. A former darling several times over that have always paid good dividends and realised a solid capital gain. I fully realise that this is not a guarantee of future returns, but I have always viewed them as a junior bluechip with their house in order who happen to have risen to a point several times over the past decade where I have cashed in, then bought back later at a more reasonable price. I am not particulary worried about their price at the moment but I find it frustrating that they appear to be grossly oversold!

Solid company, check. Great yield, check. Low P/E, check. Good forecast, check. But, at today's close, only 29 buyers are after 40,000 shares but 45 sellers want to offload 108,000 shares, and their share price has crashed 40% in the past 2-and-a-bit months.

Why?????????? Meanwhile, investors all around the place are looking for worthwhile places to park their money. Are people solely interested in the short term nowadays?

Hopefully this doesn't sound like a ramp. It is not intended to be, since I have no intention of selling anytime soon. In fact I might buy some more...

So true Eager. Many investors were burned so badly in 2009 that they never came back to the market. The market tends to be more mean reverting now, in that it doesn't like to trend as investors take profits easier than before. When the market goes risk off, everyone is a seller no matter how good the quality of the company.

I really think that we are days or weeks from the bottom...if you listen to Bloomberg at night, as i do every night...It not only helps me sleep but you get a great feeling for market sentiment, what the instos are planning, and all the latest macro garbage as well.

At the moment, the instos are starting to buy, that means we must be getting close to a bottom...personally i don't think we're quite there yet and this is my third bear market...Keep an eye on oil...that should be one of the tell tales..

Cheers,


CanOz

 

[Julia]

IAt the moment, the instos are starting to buy, that means we must be getting close to a bottom.

Why do you think this, CanOz? Europe is still in a total mess, there is little reason to feel encouraged about the US, China and India are slowing, there is record low confidence here at home, along with a falling market in stocks and housing. Surely not a lot to feel good about?

 

[McLovin]

So true Eager. Many investors were burned so badly in 2009 that they never came back to the market. The market tends to be more mean reverting now, in that it doesn't like to trend as investors take profits easier than before. When the market goes risk off, everyone is a seller no matter how good the quality of the company.

I really think that we are days or weeks from the bottom...if you listen to Bloomberg at night, as i do every night...It not only helps me sleep but you get a great feeling for market sentiment, what the instos are planning, and all the latest macro garbage as well.

At the moment, the instos are starting to buy, that means we must be getting close to a bottom...personally i don't think we're quite there yet and this is my third bear market...Keep an eye on oil...that should be one of the tell tales..

Cheers,


CanOz

I agree with this. I've been slowing buying all year. I've noticed that unlike last year good companies are holding up well. I like to think my portfolio is filled with these and during this last drawdown from the start of May to now I'm only down a bit over 1% (after a pretty solid run in the earlier part of the year), unlike the freefall last year where there was no where to hide.

When everyone is saying the end of the world is nigh it's time to buy.

 

[notting]

Amazingly it's also a time when all the worlds watching the Euro meeting and going into it expecting absolutely nothing good!
Usually it's expected to solve all the problems in the universe, if you would be listening to the media!
It's an interesting flip.

 

[So_Cynical]

I hold an amount of BKN, having accumulated them over the past year or two. A former darling several times over that have always paid good dividends and realised a solid capital gain. I fully realise that this is not a guarantee of future returns, but I have always viewed them as a junior bluechip with their house in order who happen to have risen to a point several times over the past decade where I have cashed in, then bought back later at a more reasonable price. I am not particulary worried about their price at the moment but I find it frustrating that they appear to be grossly oversold!

I think its great that Bradken is in a down trend, if they were not in a down trend and looking cheap i wouldn't be interested in buying them....at the core of my strategy is the opportunities presented when great stocks get over sold.

BKN, BLD, AMP, STO, SGM, CSR, TOL there's a heap of them at the moment...and pretty much all the major miners and most of the mining services stocks...just reinforces the fact that you have to really watch what you pay for stocks.

 

[CanOz]

Why do you think this, CanOz? Europe is still in a total mess, there is little reason to feel encouraged about the US, China and India are slowing, there is record low confidence here at home, along with a falling market in stocks and housing. Surely not a lot to feel good about?

Like i said, just about bottom...

In the EQUITY MARKETS...

CanOz