After a muted finish to trading on Thursday which saw the S&P/ASX 200 (INDEX: ^AXJO) (ASX: XJO) close down just 0.05% at 5,383, investors have had a chance to catch their breath after a five day rally which has sent the index soaring almost 4%.
Despite the index’s recent gains, there are a number of stocks which haven’t participated in the rally; rather some stocks are testing 52-week lows.
On Thursday leading outdoor, leisure, auto and sporting retailer Super Retail Group Ltd (ASX: SUL) slumped 5.9% and touched a new low of $7.41. The drop comes just a day after the stock rocketed higher after providing a positive trading update.
Also losing ground on Thursday was radio and television broadcaster Southern Cross Media Group Ltd (ASX: SXL) which dropped over 6% during intra-day trade to hit a new low of 80 cents, at the close the stock had regained some ground to finish down 2.9% at 83.5 cents.
Foundry and heavy engineering group Bradken Limited (ASX: BKN) is also trading back down near its 52-week low after losing 3.2%. Thursday’s drop brings total losses over the past five days to nearly 9%.
All three stocks are leaders in their respective industry which makes their price declines interesting and warrants attention from investors seeking attractively priced opportunities.
In the case of Super Retail it’s hard to see the retail environment getting any easier any time soon. This will create a headwind on earnings growth, however, Super Retail’s dividend is most likely sustainable and at current prices the fully franked yield could be tempting for income investors.
Southern Cross held its annual general meeting (AGM) this week and investors don’t appear impressed with the trading update or outlook provided by management for the first quarter. The updated guidance range is now for a decline in revenue of between 7% and 8% and a drop in EBITDA of between 18% and 20% – this is a dramatic drop in profitability. Major shareholder and fund manager Alan Gray, would appear to believe the current price more than fully reflects this downgrade with the investor increasing its stake from 17.21% to 19.95%.
Bradken also held its AGM this week which reinforced the ongoing difficulties facing companies exposed to the resource sector. Despite the lacklustre outlook, management did provide an improved forecast for fixed cost savings going forward which should help boost the group’s profitability in coming years.
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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.
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