This August reporting season has been incredibly tough for shareholders in some of Australia's largest listed companies. It's been so bad that the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has fallen an incredible 6.7% so far in August alone!
What Happened?
The list of companies that reported lower-than-expected earnings or announced unexpected capital raisings includes some of the most well known and widely held on the ASX. Here are six companies that I hope you weren't holding in August and below them is what you can do to avoid a similar fate next year:
Computershare Limited (ASX: CPU) shares are 16% lower over the last five days, even after a 4% rise yesterday, following the announcement that a stronger US dollar would restrict earnings in the next 12 months.
Crown Resorts Ltd (ASX: CWN) has lost over $900 million in market cap in just a few days following the shock announcement that James Packer would step down as Chairman of the company and that things weren't turning around quickly in Macau.
Bendigo and Adelaide Bank Ltd (ASX: BEN) shares have been smashed to the tune of 16% following the decision to only increase the dividend payout by two cents instead of the expected three.
Commonwealth Bank of Australia (ASX: CBA) shares are now 12% lower than their recent peak as a result of a $3.7 billion capital raising, which was announced to shore up the group's funds as the regulator clamps down on investor lending.
BHP Billiton Limited (ASX: BHP) shares are trading just above their 52-week low following an earnings release that indicated volumes would increase, while net profit was hit hard as expected.
Santos Ltd (ASX: STO) meanwhile, has lost nearly one-quarter of its value this month after it announced that it wouldn't need to raise capital any time soon!
3 Key Lessons
While it's always easy to know the past using hindsight, there are a few key takeaways that I learnt from observing the above companies.
- Regulatory changes can really sting retail shareholders, so be aware of the risks when buying.
- Dividends are king- remove the dividend, prepare for capital losses.
- Mining is tough- only the strongest will survive and despite BHP and Santos saying they're strong, shareholders continue to doubt them.
