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Few things strike more fear into the hearts of investors than waking up to an unexpected “Market Update and Outlook” on a key holding in the portfolio. While it sometimes brings good news, more often than not, a big fall in share price follows. Situations like this can create panic,... Show More
OzForex (OFX) and GBST (GBT) have both had profit warnings - both are down 19% in a day. Aconex (ACX) fell 45% in a day on a profit warning earlier the same week. It is a $1.1bn stock (was $2bn). The alarm bells are ringing. In the same week, we... Show More
Following the big falls in share price for some of the high-priced growth stocks he identified on Livewire in February 2016 https://www.livewiremarkets.com/wires/30501 we caught up with Jeremy Bendeich, Chief Investment Officer at Avoca Investment Management, to find out if they were looking more attractive. “We think that some of those... Show More
While equity markets globally have mostly celebrated the Trump rally, investors within Australian smaller and mid-cap growth companies have not felt so enthused. Continued fund flow rotation back towards larger cap Financials and Resources coupled with a weaker end to the AGM season has seen some fairly dramatic downgrades and... Show More
Scottish Pacific is the largest independent factoring company on the ASX, explains Romano Sala Tenna, Portfolio Manager at Katana Asset Management. Factoring is a type of debtor finance, where the company buys accounts receivables from a third party at a discount to face value. After hitting a high of $4.01... Show More
Since the GFC one of most unpleasant feelings for an analyst or fund manager is when a stock they hold announces a “Trading Update”. Since 2008, this has almost always been a profit downgrade, which then results in a sharp price fall, gnashing of teeth and tears from the analyst... Show More
Few feelings are worse for an investor than seeing a holding sink on the back of an unexpected profit downgrade. As holders of Surfstich (down ~72% YTD) or Murray Goulburn (down ~60% YTD) are no doubt aware, these downgrades can be devastating to performance. Common wisdom holds that avoiding the... Show More
In the stock market, as in life, good news (upgrades) travels fast while bad news tends to become evident slowly. Employees, management, and boards all want to see their companies do well, and they tend to be true believers about their companies future. This optimism can make boards and management... Show More
There are two kinds of downgrade: There are those that occur because the company was an accident waiting to happen, and those that occur when good companies encounter bad luck. The second kind is difficult to avoid but happily is uncommon. The first kind is easier to avoid. Accidents waiting... Show More
There are always downgrades occurring for a range of structural or cyclical reasons. Woolworths is an example of a shift in industry structure with the entry of a new competitor in Aldi with a strong business model. Looking for shifts in industry structure, regulation or the cyclical operating environment helps... Show More