Although many analysts had been expecting an IPO-fuelled December rally, investors have experienced the market's wrath as fears have taken over regarding the possible tapering of the US stimulus program. Since the beginning of December, the market has actually lost 4.8% following six consecutive days of trading in the red – the longest losing streak for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) in 17 months.
Whilst the effects have been widespread throughout the market, here are four companies that have heavily underperformed the index:
QBE Insurance Group (ASX: QBE) entered a trading halt last Friday before delivering an announcement regarding its North American operations, informing the market that an increase in claims provisions and write-downs for the business would turn a cash net profit after tax (NPAT) of US$850 million into a reported net loss of US$250 million. Shares were hammered when the trading halt was lifted on Monday and have plunged 32% since the announcement was made.
For shareholders of Forge Group (ASX: FGE), the month has been even more painful. Shares entered a trading halt early in November before reopening just over a fortnight ago. Entering the trading halt, shares were trading at a high of $4.43 and fell as low as 28.5c as the trading halt was lifted after the total extent of losses on two power station projects were revealed. They have since climbed back to 51c each, reflecting a total decline of 88.5%.
Small-cap stocks Codan (ASX: CDA) and Silver Chef (ASX: SIV) have also plunged this week. Codan yesterday revealed that the trading environment for its gold detection products into its three main African markets remained depressed for most of the calendar year, whereby it revised its profit guidance to be in the range of $4 million to $5 million for the first half of FY14. Whilst its shares have recovered 11.8% today, the stock is still down 30.8% since Monday.
Silver Chef also revised its profit guidance downwards due to a slower asset acquisition rate within the GoGetta business. This slowness was first recognised in the second half of FY13 but has continued into 2014, forcing the company to revise its NPAT for the six months to 31 December 2013 down 5-10% compared with the prior corresponding period. Shareholders reacted by selling shares in the company down 27%.
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