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I am aware of the rotation out of growth and understand that in time growth stocks will come back into favor but as a holder of these stocks should I follow the herd and get out or continue to hold on? Appen is a case in point but has other problems. Sitting on a relatively large loss should I sell or hold out for good news and a relate? Or Is it better to sell and buy back in later when things improve?
A: Taking a loss can be hugely clarifying, and you can always buy back in again. So, I would never dissuade someone from taking this course of action.
But if you are a long term holder, I would be inclined to hang on. I think they are way oversold.
Peter commented on this on Monday (see https://switzerreport.com.au/should-you-buy-more-of-appen-altium-and-a2-milk/ ). Yesterday, Appen re-affirmed guidance for FY21, said that it was changing its reporting currency to US dollars, announced an organisational change and foreshadowed operational savings of US$15m from FY22. It rallied around 17%.
I am not saying that Appen is out of the bad books yet, but there are more positives than negatives and we may have seen the bottom. It now has to deliver on guidance and re-confirm to the market that it can sustainably grow revenue. With the brokers, the current consensus target price is $22.23 (about 68% higher than the ASX price), range is a low of $16.00 to a high of $30.90.
