Since my last Share Price Alert on Pumpkin Patch Ltd [PPL.NZX] back in March at $1.31, PPL shares have sunk another another 16c or 15% to close at a 52 week low of $1.15 yesterday.
The principle reason for this is negativity over the whole retail sector that comes off the back of a poor profit result out in March 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 .
PPL shares have lost approx 46c this year so far and since an April 2010 high of $2.30 they have shed more than 55% 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.
Again, be patient and look for further weakness to buy.
Disc I own PPL shares in the Share Investor Portfolio
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c Share Investor 2011
