Where there’s smoke, there’s usually fire, so in this episode the panel focus on four stocks that are feeling the heat right now. Activists, short sellers and industry disruption are all creating headaches for the likes of BHP, TPG Telecom, Quintis and Aconex.

Panel: Matthew Kidman, Centennial Asset Management; Rhett Kessler, Pengana Australian Equities Fund; Ben McGarry, Totus Capital

Key Points:

  • TPG Telecom shares are down more than 50% from their highs in July 2016. Investors are still coming to grips with how the NBN will impact the company. TPG recently raised money to fund an acquisition that will see them enter the mobile market. Many investors believe they paid a very full price. 
  • Activist investor Elliot Management has been aggressively promoting a proposal that the board of BHP Billiton divest a number of ‘non-core’ assets in order to realize shareholder value. BHP has since announced plans to put their US gas assets for sale. 
  • Quintis (formerly known as TFS Corporation) is a producer of Sandalwood. Earlier this year a US based hedge fund released a report that said the company was worthless. We’ve found investors on both the short and long side of this trade. 
  • Aconex was one of the star technology and growth stories on the ASX. Today the company is one of the top 5 most shorted stocks on the bourse. Believers in the story think the company could be one of Australia’s next global success stories. Short sellers complain that they can’t get their hands on ‘borrow’ to let them short the stock. 

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