The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has closed higher, gaining losing 0.3% to 5,180. The miners made headway on Friday, the big losers on the day being the Australian dollar, trading as low as 97.5 U.S. cents, gold and retailers after a profit warning from Target.
Here’s why these three stocks are hot or not right now…
Massive conglomerate Wesfarmers (ASX: WES) closed down 2.9% today at $42.93, after issuing a profit warning for its chain of Target stores. The struggling chain’s full year earnings could drop by as much as 43% on lower sales, discounting to clear excess inventory, a rise in shoplifting, and restructuring costs. In a release, Wesfarmers said it expects the chain to post operating profits between $140 million and $160 million for the full year versus the $244 million it posted the previous fiscal year.
WorleyParsons (ASX: WOR) joined many of its mining services brethren in posting losses on the back of earnings downgrades over the past week or so. Today was Worley’s turn, its shares falling $2.79 or 12.5% to $19.50 on the back of a euphemistically titled ‘Trading Update’. The company’s ‘West Australian business’ (read: mining services) was blamed for the earnings downgrade, with profits now forecast to be below last year’s $346m underlying profit, compared to previously issued guidance predicting an increase. When miners sneeze, mining services come down with a serious case of the flu.
Virgin Australia Holdings’ (ASX: VAH) shares rebounded 10% today to end at 42 cents, after spilling 17% on Thursday. Australia’s second largest airline is experiencing turbulence after unveiling disappointing earnings guidance for the second half. Airlines are typically places where capital goes to die, so long-term investors may want to steer clear and leave this one to wanna-be stunt pilots.
Looking for something with a little less volatility and risk? Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Motley Fool writer/analyst Mike King does not own any of the stocks mentioned above.