What’s going on here? GUD, which produces industrial products like pumps, valves as well as Sunbeam consumer products, has been one of the worst performers on the ASX over the past six months, halving in price. But yesterday they jumped more than 13% to be easily the best performer on the day in a market that fell.
Why? Well, directors told the ASX in answer to a query that they knew nothing about factors that had caused the big slide in the share price that had accelerated after poor earnings were reported in late January.
Due to the decline in its Victa lawnmowing products, a big restructuring charge, and possibly easing retailing conditions, GUD’s share price has been under pressure. Up to close of business on Wednesday, the share price had halved from more than $11.30 in late 2004 to $5.36.
Then the ASX lodged a somewhat belated query asking whether there was any reason for the fall from around $8.20 in early February to under $6 this week. In fact, the share price was $8.63 before the poor interim profit was released at the end of January – as The Agereported. GUD shares fell 43 cent on 31 January, the day of the profit release, and they’ve kept falling.
The ASX query and reply were released after trading on Wednesday at 4:33pm and – guess what? On Thursday the GUD share price jumps 13.8%, which is curious considering the market was well informed about the poor profit performance in the first half.
As we said a few paragraphs ago: what’s going on here?