Kathmandu Holdings Ltd [KMD.NZX] has had what looks like a positive trading update out yesterday, the second positive one since another positive one out in January.
The share price has of course responded in kind and since that January news has risen from $1.85 to close up 15c to $2.60 today on the latest news -a 40% rise.
KMD shares have risen off an all-time low of $1.55 reached last December and yesterdays closing price is an all-time high only gotten close to back in April 2010, just a few short months after listing.
Although today's release looks like an overwhelmingly positive one, as I have said before the figures used as a comparison are Proforma ones which do not paint an accurate enough picture for the investor to make wise decision to buy KMD stock at current prices.
All is not what it seems and the market really has gotten carried away with itself here.
Be patient if you like this company, it is worth buying but at a share price well under 2 bucks. Until investors can make an accurate comparison year to year without the pro form influence and the uncertainty that brings then you must discount the value of the company until accurate comparisons can be made.
Buy under $1.80.
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c Share Investor 2011