A: James has forwarded the following comments:

 

“Obviously I am disappointed in the performance of these stocks, and the news they have reported to the stock market – although in WEB’s case it appears to be a mixture of coronavirus concerns and a broker downgrade.

 

NEA downgraded its annualised contract value (ACV) guidance for the full-year, because it lost a couple of US contracts, and the stock market took that badly – it actually grew by 23% in the first half – but that was short of expectations. In North America ACV grew by 41% in the half-year and in Australia/New Zealand it grew by 23%. Total revenue rose by 31%. Those are not bad numbers but the stock market is not in a mood to be surprised in any way on the downside, and the downgraded full-year ACV guidance went down very poorly. The company is optimistic for the future, but there was only one way the stock was headed.

 

I did say in the original article:

 

“it must be stressed that net profit is not expected this year or in FY21. However, Nearmap is only scratching the surface of the North American market, and has plenty of room for growth.”

 

That still stands. Clearly this news was not expected and broking analysts were bullish on the stock. I would not have put it in if that were not the case. But something unexpected has caused the price to fall.

 

Treasury Wine is a huge disappointment too – and again, a painful reminder of how heavily a stock can be punished for unexpected bad news. They appear to have got the US market badly wrong: I did say in the original article:

 

“However, the US market is the company’s largest by revenue, and the competition there is intense: lifting sales in the US will be more crucial over the next few years than increasing success in China. All up, though, the market expects a healthy rate of profit growth over the next couple of financial years. “