The highlights of last week were definitely in the smaller stocks – two speculative microcaps delivered gains of 600% each in the past five trading days alone.
A clothier announced a ~70% decline in profit, but saw its shares fall only 13%, BHP's much anticipated spin-off commenced trading, and shareholders in a certain contracting company have been blissfully unaware of the storm that could be brewing over its asylum seeker facilities in Nauru.
Here's what you might have missed last week:
The Banks
Bankwest, a subsidiary of Commonwealth Bank of Australia (ASX: CBA) has slashed its maximum loan-to-valuation (LVR) for home loans to 80% after the Australian Prudential Regulatory Authority (APRA) requested that banks keep investor loan growth to below 10% per annum. National Australia Bank Ltd. (ASX: NAB) indicated it would reduce discounts on investor loans, and this could be the firmest indicator yet that banking profits are at their peak.
The Miners
BHP Billiton Limited's (ASX: BHP) much-anticipated offshoot South32 Ltd (ASX: S32) launched on the ASX on Monday. Brokers appear bullish on the stock, with JP Morgan indicating the stock could rise as high as $2.95.
(Readers thinking this might be a fantastic opportunity should first check out Mike King's article on the usefulness – or lack thereof – of broker research reports)
I wrote earlier in the week that an iron ore inquiry was likely to have little impact on Australia's price-taking miners like Fortescue Metals Group Limited (ASX: FMG) and Atlas Iron Limited (ASX: AGO). The inquiry was subsequently abandoned, and optimists should take another hard look at which iron ore miners they own.
The Retailers
Losses continue at Woolworths Limited's (ASX: WOW) hardware venture, as contributor Tim McArthur revealed in his analysis of US company Lowe's (who is Woolworths' partner in Masters) quarterly report. On a positive note Masters' losses don't appear to have increased… On a less positive note, they're still massive.
Clothier OrotonGroup Limited (ASX: ORL) fell 13% yesterday, with forecast underlying earnings now predicted to be just $4.5 million, compared to $13.3 million last year. Approximately $3 million of the decline is due to a weaker Australian dollar, but it wasn't a pretty performance.
The Others
Speculative biotech stock Prima BioMed Limited (ASX: PRR) delivered an explosive 604% increase in its share price in just three days last week. Despite the massive increase, market dynamics remain fully at work and the company fell 45% on Friday after some serious profit-taking. Prima remains an incredibly risky investment and I don't believe it will justify its recent price rise.
Another company to soar over 600% was Pooled Development Fund Strategic Elements Ltd (ASX: SOR), after the company announced on Wednesday it was partnering with a University of New South Wales technology research project that could have an addressable market worth over $78 billion dollars.
International money transfer business eServGlobal Limited (ASX: ESV) closed Friday up 10% as management announced a deal with Mastercard, using eServ's HomeSend business.
(While the news is a boon for shareholders, contributor Brendon Lau thinks eServ could be overvalued at today's prices)
Despite being a shareholder in Slater & Gordon Limited (ASX: SGH), Foolish writer Tom Richardson has suggested readers watch from the sideline as the business received final approval from the UK regulator to proceed with its takeover of Quindell's Professional Services Division.
An ugly situation has arisen with Transfield Services Limited (ASX: TCL) over that company's stewardship of the asylum-seeker facilities on Nauru. Allegations of serious misconduct and similar have been targeted at company contractors and management was unable or unwilling to answer numerous questions 'on the spot' at a recent Senate inquiry. Share prices have been oblivious so far, but I would suggest investors steer clear as things could snowball rapidly.
Foolish analyst and writer Mike King has his eyes firmly on the dollar signs, with his educational article on how to collect the magic $1 million required for a 'comfortable' retirement. Using his figures, adding $25,000 to super every year (starting with super of $50,000) can see you hit the magic million in just 15 years – great news if you're in your 50s.
