Q: Hi,
Hopefully this question is general enough to not be considered personal advice!
I've done very well with Zedcor and Kraken (thank you!). You often mention their high valuations. I wouldn't mind taking some profits to put elsewhere.
Given the recent sharp decline (especially Kraken), would you say it's still richly valued enough to sell a bit? Or might it be better to wait for a rebound, given its volatility?
Hopefully this question is general enough to not be considered personal advice!
I've done very well with Zedcor and Kraken (thank you!). You often mention their high valuations. I wouldn't mind taking some profits to put elsewhere.
Given the recent sharp decline (especially Kraken), would you say it's still richly valued enough to sell a bit? Or might it be better to wait for a rebound, given its volatility?
5i Research Answer:
We would focus first on position size; with gains, it is quite likely a 2% position could have grown to 3% or even 4%, depending on when it was bought. If position size has gone beyond goals, then a trim certainly makes sense. That being said, it is not unusual for small cap stocks with big gains to see weakness in a stock market backdrop like we have right now. Investors are more worried than before, and many momentum stocks and large-gain stocks are taking hits. But this is fairly normal market behaviour, and the long term prospects of PNG do not change because of this. We still like it overall, certainly, and think its high valuation is valid, based on its moat, backlog and potential growth.