Dunedin cancer diagnostic company Pacific Edge may be the
victim of profit-taking by shareholders, as its share price
continues to settle after a stellar run.
From its breathtaking 250% gain over 17 weeks to $1.72 on
February 10, Pacific Edge had steadily slumped more than 28%,
or 49c, to trade around $1.23 yesterday.
Its earlier run was sparked by many market-sensitive
statements, signing up numerous new contracts, receiving $4.5
million in Government research and development grants and
then joining the NZX top 50 index.
Craigs Investment Partners broker Peter McIntyre said in the
case of both Pacific Edge and cloud accounting company Xero -
both of which are yet to post a maiden profit - there had
been profit-taking by shareholders.
Xero had raced from $17.95 in early October to gain almost
150% when it hit $44.79 in early March, and had since dropped
more than 31%, to trade around $30.66 yesterday.
''When shares rocket up too quickly there's invariably going
to be profit-taking. Many would have made gains even with the
[selling during the recent] pull-backs,'' Mr McIntyre said.
''It's hard to find value in the New Zealand market; the
biggest play is Genesis [partial float],'' Mr McIntyre said.
He noted ''uncertainty and weakness'' in the Dow Jones in New
York, and while retail investors were buying and selling,
institutional investors appeared to be ''taking a break and
sitting on the sidelines''.
''There's a theme of high growth stocks falling, as with the
trend in the United States, on the Nasdaq, which has been
pared back and is more defensive,'' Mr McIntyre said.