The share price of Macfarlane Group PLC (LON: MACF) pulls back today as a result of investors’ uncertainty after the strong upward trend supported for one and a half month.
How long the red trend may withhold is hard to predict, considering the brilliant company’s performance at high speed.
The recent trading range of Macfarlane Group’s stock may also raise the question: “Is MACF underestimated?”.
Since the beginning of the trading session today, MACF rolled down with 1.95%. The share price plunged to 62.75 GBX in exceeding five times the average for the company trading volume.
This market picture could be predicted observing the price chart of MACF. It could still raise the question why this happens exactly now, considering the most recent company’s developments.
The candlesticks on the price chart of MACF show formed Doji within last two trading sessions. In technical analysis, Doji appears when usually neither bulls nor bears are in a position to gain control over the market. The cross of a Doji usually suggests investors’ indecision and pretty often may predict a change in the share price direction move.
While Doji suggested to some investors that today MACF may pull back, many investors may be surprised by the sudden twist in the performance of the company’s stock based not on technical analysis but on fundamental analysis and recent expansions of Macfarlane Group.
Although there is not recent news related to Macfarlane, not a lot of companies and corporations may be proud with announcing and implementation of three major events in a time frame of three and a half months.
Macfarlane Group endorsed the acquisition of the packaging business of Edward McNeil Limited at the beginning of May. The acquired company was a Glasgow based business with over 50 years trading history and generated sales of £3.60 million as of the last December.
On July 26, 2016 Macfarlane Group confirmed two more major for the company events. The company announced the conditional acquisition of Nelsons for Cartons and Packaging Limited in combination with a proposed placing to raise approximately £5.8 million before expenses to secure the deal.
According to the company’s statement, the acquired company “has very little customer overlap with Macfarlane and the Directors believe Nelsons will provide access to new customers and will increase the Company’s shelf ready packaging (“SRP”) product range.”.
For those who are curious, at the financial year ended 31 December 2015, Nelsons for Cartons and Packaging Limited had recorded £7.9 million in revenues, EBITDA of approximately £0.9 million and an operating profit of approximately £0.8 million.
Based on all these events, it is worth to ask the question: “Is the stock of Macfarlane Group PLC (LON: MACF) underestimated?”
Macfarlane Group is a headquartered in Glasgow company, which employs over 780 people at 29 sites, mainly in the UK and Ireland. With its more than 60 years’ experience in the UK packaging industry the company operates in the following segments: Distribution of protective packaging products, Labels designs and printing of high quality self-adhesive and resealable labels, Packaging Design and Manufacture.
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