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September’s underperformers

The Australian share market has rallied hard over the last few months and has defied the expectations of many analysts who suggested it would fall in September. The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has pushed on to achieve fresh five-year highs, having gained 140 points or 2.7%.

However, a number of companies have acted as a drag on the benchmark index, holding it back from climbing even higher.

  • QBE Insurance Group (ASX: QBE) has fallen 3.8% since the beginning of the month, taking its plunge since mid-August to 16.6%. Having failed to impress shareholders with its half-year report, the stock has continued to fall further in light of the strengthening Australian dollar. QBE relies on the US market for much of its revenue and a strong Australian dollar will have a negative effect on its returns.
  • Despite having rallied 8% in a single day just last week, Newcrest Mining (ASX: NCM) has plunged nearly 10% for September so far. The stock has been affected by the fall in the value of spot gold, which has fallen by 5.5% in the same time.
  • Myer (ASX: MYR) has conceded 7% of its value so far in September, despite having signed an exclusive deal with Premier Investment Group’s (ASX: PMV) sleepwear brand Peter Alexander. Although the retail sector has struggled over the last 12 months, consumer confidence should receive a spark as house prices lift and business sentiment increases. Whilst Myer has fallen however, other retailers such as JB Hi-Fi (ASX: JBH) and Harvey Norman (ASX: HVN) have actually recognised gains of 10.9% and 8.6%, respectively.

Foolish takeaway

Although it is unpleasant for shareholders to watch their companies slide in value, share price falls can also offer investors opportunities to pick up quality stocks. Whilst Newcrest Mining still poses as a very risky stock despite its 10% plunge, Myer and QBE could be excellent additions to your portfolio at their current valuations.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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