FNArena’s Weekly Insights – May 01 2023
In todays Weekly Insights:
-Confession Season… It’s Baaaaaack!
-Seeking Quality & Growth Offshore
By Rudi Filapek-Vandyck, Editor
Confession Season… It’s Baaaaaack!
Once upon a time the two months preceding the end of financial year, and the subsequent weeks leading into reporting season in Australia, caused more than just a little bit of anxiety among investors as market updates might well translate into that universally dreaded Profit Warning that has the potential to inflict a lot of damage to a company’s share price.
Recent years have not seen much in terms of profit warnings ahead of the official results season, but early signals are this year might be different. The past week alone has seen market updates by the likes of AdBri ((ABC)), Bubs Australia ((BUB)), Cluey ((CLU)), Mirvac Group ((MGR)), Synlait Milk ((SM1)) and Insignia Financial ((IFL)) force analysts to downgrade forecasts for the financial year running.
Troubled IOUpay ((IOU)) has effectively gone out of business. Most production updates by miners and energy companies proved disappointing too, marred by project delays, weather impact, lower prices and higher operational costs.
It’s not all bad news though, as share prices of Bubs, Mirvac Group and Insignia Financial had already largely accounted for what was coming. Sometimes bad news can actually free-up the next move upwards on the reasonable prospect of less-bad conditions ahead, potentially.
Regardless, investors would be wise to not simply assume today’s market laggards are by default a great bargain with Synlait Milk yet again proving there’s no bottom when troubles keep accumulating.
Trading around $12 in 2018 and having started the running calendar year above $4, today’s share price of less than $1.50 reminds me of the old share market joke:
What’s a stock that’s down by -90%?
That’s a stock that first fell by -80%, and then halved yet again.
