big jump in profit with big fall in price, page-25

So anyway, I am not sure about what price a bottom may occur at but rather when it may.

The number one information that affects share price is news on profit and how it differs to the markets expectation. Now a company may in fact record an annual profit greater than years gone by but if it is less than what is expected by the market then the share price will drop for investor generally expect a certain rate of growth.

So anyway, as I have mentioned interest rates rises may well create a force that reduces purchases DVD players, plasma TV's etc, etc...The markets current down turn in the share price of JBH may well be due to expectation of reduced future profits driven by interest rate. Whilst there is expectation of future interest rate rises there is greater downward pressure on the share price.

There are a few things that can cause the share price to rise again...

1. Interest rates fall...unlikely

2. This is the basis for an increase in share price that I would be concentrating on....The company proves profits above expectation of the market despite past interest rate rises. Now the bounce may not occur of the next profit announcement. Wholesale investors (whose opinions dictate most large companies prices) know enough about the market to know that it generally takes 12 to 18 months for an interest rate change to have effect on expenditure. Hence a definitive upward trend may not occur until then despite profits in the mean time being quite good.

3. Similarly a significantly large increase in dividends shows that the company has confidence in achieving great profits in the future. Not sure that this will happen.

4. The company trades at book value...unlikely to fall so far.

Summary: Basically the way that I see it the share price is falling to a level inline with future expectations of profit. These expectations are falling with increasing expectation of interest rate rises. Basically wait until interest rates appear to stablise and then wait for effects on consumer behavior to develop. Wait for profit announcements and then if good and the market likes it and you have faith in the company to reach greater future profits....enter.

Any thoughts?

Naturally from my type of education, my analysis is based purely on fundamentals. A chartist may enlighten us with something different.