Sometimes the market can overreact based on no news, rather than actual information.
An information vacuum doesn't mean the business has changed at all, but itchy investors can sell on the basis of speculation or imagination.
The analysts at Forager Funds feel like this is the case with payment technology provider Tyro Payments Ltd (ASX: TYR).
It's been a wild and mostly unpleasant ride for Tyro investors this year, seeing the ASX stock halve from February to the end of last month.
October alone was absolutely brutal, plunging a horrifying 36.5%.
No news is bad news, the market said
The Forager team noted that Tyro held an investors' day halfway through October, where there wasn't much in the way of new announcements.
"It also didn't provide a trading update, saying it will do so at its AGM in November," read a Forager report to clients.
"Other investors were clearly expecting more — jettisoning its banking arm was one rumoured possibility."
Oddly enough that perceived disappointment was compounded by what was happening in Europe to another company.
"The Tyro share price fell for nine days straight after the event, with a downgrade by European payment giant Worldline SA (EPA:WLN) adding to the sector pessimism and sending that company's share price tumbling more than 50% in a day."
Buying more of this ASX stock while it's cheap
Despite the shocking fall, Forager analysts are still backing Tyro.
"We haven't made any changes to our valuation of the business.
"An understated management team is a good thing, in our view, and a continuation of the existing strategy — continued growth and a strong focus on cost control — is all we need for a successful investment."
In fact, the team has taken advantage of the fall in share price.
"We have used the selloff to meaningfully increase the position during the month."
Tyro shareholders have experienced some relief this month as the stock has lifted 20%.
That still leaves it more than 25% for the year to date though.
Tyro remains well supported in the professional community. According to CMC Markets, six out of nine analysts currently rate the stock as a buy.
