It was a horror day on the markets – particularly for shareholders in resources companies. The S&P/ASX 300 (Index: ^AXKO) (ASX: XKO) plunged 3.8% to 4,873.40, with every sector heavily sold off.
As bad as a 3.8% fall across the whole market was, several stocks still managed to plunge even further…
Paladin Energy Ltd (ASX: PDN) share price plunged 13.2% to $0.17. The uranium miner is obviously feeling the effects of falling commodities prices – with uranium currently fetching US$37.25 per pound. As I wrote back in August after shares jumped 12% to 20.2 cents, "Paladin is still one stock to avoid". Uranium prices are unlikely to significantly recover in the short-term, all the while Paladin is bleeding cash and it wouldn't surprise me to see the miner hit the wall.
Karoon Gas Australia Limited's (ASX: KAR) share price crashed 11.1% to $1.67. Another company that has promised so much and delivered so little, Karoon has been hard hit by falling oil prices. Still the market thinks the company is worth more than $400 million, but unfortunately, shareholders are likely to get their hands burnt. If you fancy your chances in a lottery, Karoon might just be what you are after.
Origin Energy Ltd's (ASX: ORG) share price sank 10.4% to $6.10. Like Karoon, Origin has been hit by falling oil prices, and a credit rating of just above junk status, which could be about head even lower. That's bad news for Origin with its $11 billion of debt, with interest rates likely to rise. Still, the company does have a diversified revenue base, which may be able to keep the creditors at bay.
AWE Limited (ASX: AWE) saw its share price drop 9.2% to $0.64. Another oil and gas producer which can see its share price bob like a cork on benchmark oil prices, AWE's share price can soar or sink, depending on the direction the oil price is heading. With Brent crude falling 2.6% overnight to US$47.34 a barrel, it was a near certainty that AWE's share price would tumble today.
Santos Ltd's (ASX: STO) share price fell 9.1% to $4.28. Australia's second-largest independent ASX-listed oil and gas producer is not only struggling with lower oil prices, but there are grave concerns over the company's LNG projects producing a profitable return on investment and its huge debt pile. Santos appears to have become a forced seller of assets and is in the middle of a strategic review – which could see the company end up in the hands of a larger predator.
