$TATE – Tate and Lyle – I pass

TATE (Tate & Lyle) make sweeteners. I noticed the company issued a profits warning recently, its third in the last year. The shares fell by about 14%. The shares also nosedived on the previous warnings.

I had noted in September 2014 (http://is.gd/Ik8oBw) that the problems were “supply chain issues, weather affecting corn plant production, an an industrial incident at its Singapore facility.” The problems this time are capacity constraints in the wider US transportation network (really, they’re going with that one?) and weakening EU sugar prices.

If you had bought on the last two warnings, you would have had opportunities to bail out at a profit. It’s difficult to know if, and how much of a profit you would have made without the benefit of hindsight.

I found Stockopedia’s article on “What should you do when a stock plummets” ( http://is.gd/RGFQK0) to be very interesting, and I am experimenting with putting it into action. I’m creating a decision matrix, which I will report on in a future blog post. TATE has something of a middling momentum, with value straddling neutral/undervalued. I would therefore rate it as “keep”: no point selling if you hold it, no point buying if you don’t hold it.


About mcturra2000

Computer programmer living in Scotland.
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