This post was originally published on this site
On the face of it, our suggestion that readers buy shares in Kromek, the Aim-listed maker of advanced detection equipment, has not gone well.
We first tipped the shares at 27p in March, and reiterated the advice at 29.75p in May, and at 26.63p the following month. At 23.25p last night, readers who took our advice are sitting on paper losses of 13.9pc, 21.8pc and 12.7pc respectively.
But this is a case where it looks as though the market may have got it wrong – something that is more likely in the case of a small stock such as Kromek.
Various factors can cause the market to misprice a small business, ranging from technical devices such as stop-losses to simple impatience on the part of investors. Gervais Williams, a respected investor in smaller companies, who holds Kromek in his Miton UK Smaller Companies fund, said that because there hadn’t been much upward momentum in the share price, even…