Financial Trading Blog
Stock of the day 26/06/2015 – Imagination Technologies Group PLC
The first few months of 2015 were great for Imagination Technologies, with the stock growing from £2.31 at the start of the year to a peak of £2.67 in the middle of February. By March 17th the stock had fallen off slight, to £2.58; cut to March 18th and it had fallen another 10.5% and was trading back at £2.31. The reason for this abrupt decline was Imagination’s most recent trading statement, which saw the company label its 2015 activity as ‘a little muted,’, causing it to reduce its forecast for licensing growth from 10% to a slightly more disappointing single digit figure.
(Source: IT-Finance.com 26/06/2015)
This trading update sparked a run of losses for Imagination that culminated in a 2015 low of £1.91 at the start of May. However across that month the stock began to pick up steam, rising to £2.19 at the end of May before a 6.7% jump on June 1st pushed it to £2.33. The catalyst for this surge was an update from Liberum, which labelled Imagination a takeover target, listing Apple (a key customer of the tech stock’s wares) amongst the UK company’s potential suitors. Since then the stock has fallen away from this slightly inflated price as nothing came of that initial Liberum speculation, and Imagination Technologies is currently trading at £2.25 (26/06/2015, IT-Finance.com).
Worryingly for Imagination, its sector has been struggling of late. Both Premier Farnell and Oxford Instruments released disappointing figures in the last few weeks, and given the tone of that trading statement in March, a weak set of results could be on the cards for Imagination. This has left the company with a consensus rating of ‘hold’ with an average target price of £2.03
A good morning for Tesco led to a good morning for the supermarket sector as a whole. News that the leading supermarket’s falling sales had slowed from a 4% decline to a mere 1.3% decline for the 3 months to the end of May year-on-year has been enough to boost investors’ faith in the much beleaguered supermarket, at least for this Friday, as the company climbed by 3% this morning to a near 6 week high. Sainsbury’s followed by posting nearly 2% in growth whilst Morrisons was up by 1.4% and Ocado leapt by just shy of 1.5%.
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