Shares of Sirtex Medical Limited (ASX: SRX) have slid 5.3% this morning to $24.95, which compares unfavourably to its benchmark, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), which has retreated just 0.1%.
While investors might be wondering why the stock has fallen so heavily – despite the absence of any bad news being released – it's most likely a case of profit taking. Shareholders of the biotechnology giant have enjoyed an incredible rally over the last eight trading days in which time the stock has surged just over 27%, having risen from $20.73 to close at $26.34 on Tuesday.
While it certainly appears that investors sold the stock off too heavily following its disappointing SIRFLOX trial result in March, it is possible that they are now becoming cautious of bidding it too high as well. A final report is due in late May which could yield a positive surprise, but it could also present more reasons for investors to doubt Sirtex's future potential.
At its current price, long-term investors with a high tolerance for risk may want to consider building a Sirtex position in their portfolio, but it's certainly not for the faint of heart.
