The Costa Group (ASX: CGC) share price is up 4% to $5.36 today and now up around 20% over the past two weeks it hit a low around $4.40 on January 10 2019. On that day the Costa share price lost nearly 40% of its value after the fruit and vegetable grower warned shareholders it expected flat net profit growth for the year ending June 30, 2019, compared to prior guidance for double-digit profit growth.
The approximate 20% rise from share price lows hit just two weeks ago shows how share prices can overshoot on the upside and downside as investors tend to get either too get over enthusiastic or scared on the back of sharp share price movements.
Costa blamed the profit downgrade on falling tomato, berry and avocado prices, but claimed it saw this phenomenon as cyclical in that it expected prices to rebound in time. The company will provide a further update to profit guidance when it releases its half-year financial results this February.
