Huge gain by Mooring Systems: notable in market performers

Friday 30th March 2001

By Peter V O'Brien

The first quarter of 2001 saw the usual substantial variations in sharemarket price performance.

The 10 biggest gains ("pluses") and falls ("minuses") are in the table. While it may seem surprising - amazing could be a better word - that Brierley Investments ranked five in the pluses table, the price was 28c at the end of 2000 (the equivalent of a current 56c after the recent 1:2 consolidation), the lowest since the company moved away from its infancy 40 years ago.

Price comparisons made over a three-month period have limited relevance to medium to long-term stock performance but the exercise has merit in showing how the market reacted in the short term.

The massive gain in Mooring Systems' price, for example, may, or may not, be sustained. People who were in the Christchurch-based automated mooring systems company at the end of last year saw their holdings erupt in value by the end of last week.

Mooring Systems is a new market company (NMC), with 2.8 million shares on issue.

The table excluded internet-related and apparent "technology" companies that had already gone to the penny-dreadful category of selling for a few cents when 2000 closed.

The table shows several technology and internet stocks in both the pluses and minuses columns but investors will see the difference in each list.

Such companies in the pluses column provide proven products and/or services, while those in the minuses list are either involved in greenfields/developing operations or are searching for business based on the maybe/never-never philosophy.

Genesis Research & Development seemed an example of market fickleness. The shares jumped last year after being issued at $6 in an initial public offering. Little happened during a post-listing general market downturn but the stock later reached a high of $8.48. The company's latest result was better than forecast in its investment statement and prospectus, which projected a deficit of $9.97 million for the year ended December 31.

Earnings were $723,000, the improved results being achieved through Genesis sublicencing its vaccine for the treatment of psoriasis (a skin disease) to partners in Japan and North America.

The result, announced at the end of January, did little for the share price as the table shows.

Companies like Genesis are involved in "at-the-edge" activities and inevitably have to use language in their reports which some individual investors may find difficult to follow.

Genesis' preliminary report for the year ended December had a section "About Genesis: Genesis is a New Zealand-based technology company whose core business is genomics - the translation and use of the chemical information carried within genes of living organisms. Genesis specialises in discovery, building EST databases from a diverse range of carefully selected gene pools, targeting genes, promoters, or proteins that have commercial value through their potential ability to alter a living process or to create a new industrial process. Genesis is not a manufacturer or distributor of product: it mines these databases and uses collaboration with industry partners to develop innovative biotechnology products of commercial value from its discovery activities."

Other documents expand on the company's activities but the extract from the preliminary report is an example of potential problems when transmitting information about technology companies.

Electrical products manufacturer PDL Holdings' price related to a jump on relatively low volume at the end of February when an apparent single buyer entered the market after the French Schneider Electrical Industries completed a bid for 19.9% of the company at $5.20 a share.

Sanford benefited from the weaker New Zealand dollar, higher international prices for many fish species and a good season. Telecom was up and down in the period, confirming the effect of timing when buying, selling or trading shares.

As part of the international telco industry and New Zealand's biggest company, Telecom is very susceptible to the gyrations of overseas markets.

There were several gyrations since the end of last year.

Otter Gold Mines' situation was examined in Shoeshine's column in The National Business Review, March 23.

Other companies were just outside the top 10 and bottom 10 price performers in the period but still ahead or below the 8.2% gain in the NZSE 40 capital index.

Share price pluses and minuses
Rank	Company	Pluses	Rank	Company	Minuses

1	Mooring Systems	191.7	1	Strathmore	64.3
2	PDL	69.4	2	Newcall	60.0
3	Cabletalk	60.0	3	Waste Management	43.8
4	Vending Technologies	58.5	4	Genesis	43.6
5	BIL	28.6	5	Selector	41.1
6	Sanford	25.0	6	E-Ventures	32.5
7	GDC Comms	22.0	7	Otter	29.4
8	PTS Auck	20.2	8	Renaissance	27.4
9	Telecom	18.1	9	Scott Technology	27.3
10	Calan Health	17.5	10	Retailx	25.0
	NZSE 40 Index	8.2			N/A

Comments from our readers

No comments yet