The scary beginning of this drama has been inspired by possible speculative moods on company’s stock some time ago. The tragedy has been almost successfully finalised with a happy end by Devro’s top management these days.
DVO opened the trading week at 168 GBX with an intention to continue its upward move. Within the trading session today, the share price pulled back to close at 166.75 GBX.
Although the weak trading activity the stock succeeded to keep its defence strategy making no promise for how long time this position can be supported.
The all story started one month ago, when some very likely speculative moods downgraded the stock of Devro. On November 11, 2016 Numis, Exane BNP, Socgen and HSBC announced their analysts’ recommendations. All they proposed a price target for DVO between 190 and 209 GBX, while the share price of Devro was traded at 226 GBX on November 09, 2016.
In absolute numbers, the stock has been depreciated in a day time with 117 GBX. For some investors, this has been the perfect time to bank gains. For other investors, this was booked loss of more than 100%.
For the period from November 10, 2016 there was only one official announcement made by the company. The second week of November Devro released its Trading Update. It presented company’s trading activity for the period 1 July 2016 to 10 November 2016.
The company’s trading outlook has not been much different than the usual known by investors. The new and possibly pessimistic news has been related to the operating profit forecast for 2017. Devro Plc stated that expects sales volumes in 2017 to be approximately 10% lower than previously planned and “the Board now expects underlying operating profit* for 2017 to be lower than previous expectations.”
Considering what in a month time happened with the share price performance of Devro Plc. it is worth to ask the question: “How is it possible a 10% decrease in planned sales’ volume to may cause 100% discharge of the share price?”
As of today, there are no other official company’s news with an exception of the aforementioned Trading Update and many announcements about company’s directors buying shares.
Devro Plc. is a Glasgow headquartered business. The company produces collagen products for the food industry.
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