Newbie & my first question

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Old Dec 20, 2016, 1:00pm   #1
 
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Newbie & my first question

Hello There, I am new to this website and also to active investing. I have been dabbling with stocks for few years and have developed keen interest on it. I have a basic question. From my fundamental analysis I see that some stocks have good EPS but have poor share price movement. They don't see any movement for days, to be specific I am looking at stocks like Ideagen, Treatt PLC, ECO Animal health group. Is there a specific reason why shares don't see any change in price for days and if they move it is a modest change inspite of having some good financial results?

Any thoughts much appreciated
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Old Dec 20, 2016, 3:00pm   #2
Joined Feb 2002
Multiple possible reasons.

You're looking at an EPS figure today which could be weeks old. While the company's performance might still be just as good as it was then, maybe the share price was jumped up by buyers weeks ago.

On the other hand, maybe the market was already expecting EPS to be a better figure when it was released weeks ago, so they actually bought all the shares they wanted before the figure was released. Under this scenario, its even possible to see the share price fall after the release of good news, as the market might take the view the best part of the share price rise has already taken place.

A traditional view of investing/trading in stocks has been to use fundamental analysis to select the right stocks to buy, and technical analysis to identify the right moment to buy them.
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Old Dec 20, 2016, 4:33pm   #3
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Originally Posted by Balpasu View Post
. . . Is there a specific reason why shares don't see any change in price for days and if they move it is a modest change inspite of having some good financial results?
Hi Balpasu,
Welcome to T2W.

I'm afraid the game of trading and investing doesn't run on pure logic: it's not like engineering whereby you can say with confidence that if ABC happens then XYZ is sure to follow. If it were otherwise, then everyone would buy shares in stocks with great fundamentals and good financial results and be fabulously rich. If only it were that easy!

With regard to why the share price hasn't moved, (either up or down), in addition to Tom's comments, another reason might simply be that there's very little trading activity (refered to as 'liquidity'). For price to move, you need buyers and sellers. Without them, price ain't going anywhere. If this problem persists, I suggest you look at bigger companies with larger capitalisations that comprise the major indices.

Lastly, T2W is aimed primarily at traders rather than investors, so the focus of everyone here is short term, usually ranging from minutes to a few weeks. If you're looking to invest over many months or years, you might like to check out a bespoke forum such as The Motley Fool.
Tim.
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