Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Pacific Edge slumps to 5-month low as growth stocks struggle

Pacific Edge shares slump to five-month low as growth stocks remain under pressure

By Suze Metherell

April 11 (BusinessDesk) – Pacific Edge shares slumped to a five-month low, as the local stock market joined a global sell-off amid concerns high-growth companies may struggle to convert sales into profits.

Shares in the Dunedin-based bladder cancer text developer fell as much as 15 percent to $1.04, the lowest since Oct. 23, and were recently down 6.6 percent to $1.14. The shares have dropped 25 percent in the past month.

Stocks on Wall Street sank yesterday, with the tech-heavy Nasdaq Composite Index recording its biggest daily decline since November 2011. Investors have been selling stocks in growth-orientated internet and biotech firms in recent months, cashing in gains from last year. The NZX 50 Index, which is the first major benchmark index to reopen after the US market closes, slid 1.1 percent led by growth stocks.

“It’s a continuation of the Nasdaq sell down,” said Matthew Goodson, executive director at Salt Funds Management which holds Pacific Edge stock. “It’s sentiment - fear and greed and the balance between the two as opposed to the fundamentals.”

Xero, whose shares soared 325 percent last year, fell as low as $29.80 and recently traded down 9.1 percent at $30.10. The stock soared after the Wellington-based company raised $180 million in October, selling 9.92 million shares at $18.15 apiece, but has come in for some sharp selling in the past month, dropping 31 percent.

Xero is rated a 'sell' by two analysts and a 'buy' by a third, with a median price target of $36, according to Reuters data. Pacific Edge does not have analyst coverage yet, said Goodson.

“We actually think Pacific Edge is travelling pretty well, it’s just a question of the valuation you put on it,” Goodson said. “Unlike the Xeros of this world it doesn’t actually have any analyst coverage, so some of its movements tend to be dominated by retail investors in a bit of an information vacuum” and global jitters.

Diligent Board Member Services, the governance app developer, fell 1.2 percent at $4.15, and has declined 11 percent in the past month.

Outside the benchmark index other tech stocks declined. SLI Systems, the search engine developer, slipped 1 percent to $2.03, Wynyard Group, the security software firm, sank 5.2 percent to $2.37 and GeoOp, the small business task management app maker, fell 3.3 percent to $1.45.

Salt Funds’ Goodson said the recent declines made some growth stocks more attractive, though that wasn’t true of all of them.

“One or two are reaching more buyable levels although you still need an awful lot of future delivery and one or two of them are still very expensive on any future growth expectations,” he said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

March 2017: Commerce Commission Delays Decision On Fairfax-NZME

The Commerce Commission has delayed its decision on the proposed merger between NZME and Fairfax Media's New Zealand assets, saying the deal is complex and it needs more time to assess the impact on both news content and the advertising market. More>>

ALSO:

Plan Plan: Permanent Independent Hearings Panel Proposed For Planning

The Productivity Commission recommends creating a permanent independent hearings panel like the one that cut through local politics to settle Auckland’s Unitary Plan, for the whole country. More>>

ALSO:

Statistics: NZ Jobless Rate Falls To 5.1% Under New Methodology

New Zealand's unemployment rate fell more than expected in the second quarter as Statistics New Zealand adopted a new way of measuring the labour market to bring the country in line with international practices, and while a growing economy continued to support jobs growth. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news