It doesn't seem that baffling to me; profit taking. We've been through this before (remember the time we went from 95 to the low 80's?). Even though there is money to made playing these bounces, I'm long and staying put.
Dale
Wednesday March 11, 6:21 pm Eastern Time
Geac Computer stock fall baffles analysts
TORONTO, March 11 (Reuters) - Geac Computer Inc's stock dropped sharply on Wednesday after climbing steadily over the past few weeks to near-record levels.
The company's shares fell $6 to $56 in brisk morning trading, after closing on Tuesday at $62.
Geac on Tuesday reported third-quarter net income of $44.8 million, compared with a net loss of $108.2 million in the comparable period of 1997.
The company also reported $174.2 million in revenue -- up $30 million from the third quarter of last year.
Analysts scrambled to explain the steep fall in the stock price, despite the turnaround in the results. Geac has also received a recent string of rave reviews in the financial press.
''The expectations were placed too high, because they've been able to beat analysts' expectations by the past two quarters. Today's numbers weren't exactly what I was expecting...'' said Pierre Boucher, a technology analyst at HSBC James Capel.
He cited high ''whisper estimates'' among analysts and buyers as a reason for the sudden price drop. However, he said the long-term outlook for the company was still positive.
''The company's in a great position to continue to generate revenue, they're making a lot of cash,'' he said.
Other analysts blamed the stock price decline on a lack of acquisitions by Geac in the third quarter. ''One of the things that tends to drive the Geac stock is acquiring other companies,'' said Duncan Stewart, portfolio manager at the Navigator Canadian Technology Fund.
Geac stated that it has focused recently on investing in sales as well as research and development.
Stewart said that Geac would not comment on rumors of another acquisition in a private conference call with analysts today.
The company is currently investing in the development of millenium-compliant software products for the financial industry. |
