Trythree, the sell off in MBE was in line with the global sell off in the tech sector, taking its leads from the NASDAQ as concerns about valuation came into focus and investors locking in profits after a strong 2013. MBE was no different after a strong 2013 run and it is not really a surprise to see a sell off in line with the sector.
However, there is nothing on the fundamental front to change our view from say, mid to late February when the half year accounts were released. Further, the capital raising was done at an opportune time (in hindsight) and also done with minimal discount to VWAP.
You pointed out that Perennial has been buying heavily in the past two weeks. Of course, you can interpret this action in two ways, i.e. they are accumulating because they believe MBE is a good value investment, or they are doing it solely to support the share price.
Take it as you will (I do not know the answer), but I do not think Perennial would want to be stuck with a larger position if they did not believe in MBE; particularly as their philosophy is:
"Perennial Growth's investment process is based on a 'growth' stockpicking investment style. Perennial Growth holds the belief that investment markets are not fully efficient as asset prices are sometimes driven by irrational influences. As a growth investor, Perennial Growth seeks to invest in companies that can grow their business profitably and add additional value to their shareholders. Perennial Growth seeks to invest in companies that grow in a sustainable manner."
http://www.perennial.net.au/growth/about/process
Also to put it out there, they can be wrong.
MBE Price at posting:
23.0¢ Sentiment: None Disclosure: Held
