At times certain passive and even actively managed funds are forced out of their positions for various reasons. It may not be rationale but reasonable given their mandates. For eg. certain passive funds may be forced out if the equity is no longer part of the MSCI Small Cap index irrespective of the quality of the underlying equity.
Actively managed funds may be forced out of positions (bcoz of mandates) based on market cap, liquidity, concentration risk etc etc or in extreme if there is change in PM or lead analyst on the stock.
So its difficult to gauge if it was merely a rationale business decision. Lot of factors could contribute towards culling the position.
Having said that once this massive passive selling is done, any catalyst can bring about significant upside moves.
Another interesting point is that all brokers covering the stock are either underweight or neutral. Given we have passed thru the near-term liquidity crunch, we could expect a few upgrades.
Enjoy the ride
CRN Price at posting:
14.5¢ Sentiment: Buy Disclosure: Held
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