Q: Hi. Follow-up on your previous EQB good results quarter question. Being a rookie investor I just don’t understand after such a good quarterly report why the stock went on sale down $9.99 at one time today. Can you explain in plain layman’s term why or at least give a guess why such a big drop? If this report would have been horrible does that mean the price would have jumped? Just when I thought I knew how the game worked this change has added some confusion to my thought process. Thanks again for all that you’se guys do for us amateurs. Ken. :-)
5i Research Answer:
Some investors may focus on single-line items, such as credit quality, and found something they don't like. Investors do like to worry. National Bank cut its rating to Sector Perform and some would have sold on that news. Some would be taking profits after a 37% one-year gain. To put things in perspective, the drop only takes the stock back to close to where it was on February 13, and it was lower than the current price six weeks ago. We would focus more on the big picture here. The company reported a good quarter, but not 'perfect' in the eyes of some. The drop brings valuation back to an attractive 7X earnings.