After a rocky start to October, the S&P/ASX 200 appears to be finding its feet, rising almost 5% in the past two weeks.
This time of year can be boring for investors, as the excitement of earnings season has come and gone, and there's not much else going on. However, it is a great time to re-examine your expectations for stocks.
With this in mind, how will these companies fare over the next 12 months?
Stockland Corporation Ltd (ASX: SGP) – last traded at $3.79, down 4% for the year
Ordinarily a 4% fall for the year isn't worth writing home about. However, Stockland spent most of the year trading higher and in light of changing expectations for the housing market it is worth a closer look.
While its income is sustainable, profits in recent years have been helped along by revaluations in much of Stockland's portfolio as well as residential property development and I consider the company to be fairly exposed to a housing downturn.
Whether one will eventuate is up in the air at this point, but I suspect nervous investors could send its price lower over the next twelve months.
GBST Holdings Limited (ASX: GBT) – last traded at $3.65, down 26% for the year
Software business GBST Holdings saw its price smashed 23% lower earlier this week after an earnings downgrade. A number of investors were probably also made uncomfortable by founder Stephen Lake retiring and selling some holdings, which may have contributed to the fall.
A number of deferred projects resulted in lower than expected earnings which sent the share price tumbling. The projects were delayed – not cancelled – and GBST has indicated it expects full-year Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) to be between $19-$23.5m, compared to $24m the previous year.
GBST expects to return to growth in Financial Year 2017 and I expect the company's share price will begin to rise again then.
