Why is Computershare (CPU) falling?
Down 11% in less than a week. some decline before SVB and 7% on 13/03. Any ideas? I would have thought as no news the decline is benign.
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Answer
Hi Peter,
I think at this stage as you suspect Computershare has been caught up in the downdraft of a weak market, while CPU has fallen -25% from its November high we shouldn’t ignore the +245% appreciation post COVID – plus the stock paid a 30c dividend last month.
However at MM we are not huge fans of CPU having been neutral to bearish the registry and corporate services business for the last few months which was reinforced following the disappointing composition of its February earnings report. Finally with CPU being a beneficiary of higher interest rates this tailwind is coming to an end in our opinion.
We aren’t considering CPU around $21 although bit is approaching technical support after correcting 37% of its previous 2 year rally.
