Pumpkin Patch Ltd [PPL.NZX] shares really got another good arse caning yesterday when its share price dropped another 6c to close at a 52 week low of $1.31.
The principle reason for this was a net profit result out yesterday that was down 44% on last years result.
Of course the market knew of this back in January when a profit downgrade was announced to the market so the result seemed to be a surprise to some.
PPL shares have lost approx 30c this year so far and since and since an April 2010 high of $2.30 they have shed more than 40% of their value.
This presents an opportunity to buy PPL on the cheapish side.
I would be patient though, because management don't seem very clear about the future of the company (commentary in the profit release was confusing to me) and its trading proposition over the calendar year and further pressure is likely to come over the rest of 2011 as people close their wallets and head for cheaper less brand oriented fare.
This will not last however, PPL is a good brand and once the economy gets going again - whenever that is - we will see this company doing better as mums start to look for brands again.
Be patient and look for further weakness to buy.
Disc I own PPL shares in the Share Investor Portfolio
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