ALTHOUGH the recent stock market rally has been very much led by blue chips, a follow-through into second-line stocks by retail investors seems inevitable, and the rewards promise to be considerable.
One small company which has been left behind is integrated circuit manufacturer QPL International, whose shares have remained flat in the face of substantial earnings growth.
At the end of July, the company announced a 64.5 per cent jump in net profit to $201 million, reflecting strong demand for its products from the personal computer and telecommunications industries and a substantial increase in capacity, primarily from expansion of its Hong Kong plant.
The share price closed yesterday at 93 cents compared with a 1993 high of $1.29, primarily due to concerns over the impact of the explosion at Sumitomo's epoxy resin factory in Japan.
The factory is the world's major supplier of a vital moulding compound.
However, epoxy resin represents less than three per cent of QPL's total costs, and the 30 per cent increase in prices that resulted from the Sumitomo blast would directly hit profit margins by less than two per cent.