Today was a down day for the S&P/ASX 200 which lost 0.44% as falling commodity prices dragged down the index. A number of shares were hit particularly hard, including:
Healthscope Ltd (ASX: HSO) shares, which lost 5% of their value to hit $2.51 as investors limited their exposure following the spectacular crashes in the share price of Dick Smith Holdings Ltd (ASX: DSH) and Spotless Group Holdings Ltd (ASX: SPT) earlier this week. Dick Smith and Spotless are recent IPOs foisted off on the public by private equity sellers; both businesses lost roughly half of their value after making significant downgrades this week.
Healthscope is also a recent private equity offering, which is why holders are getting nervous. Shares are starting to look cheap but after such spectacular falls at Spotless and Dick Smith, perhaps investors are right to be cautious.
Greencross Limited (ASX: GXL) fell 6% to $5.37 on no news, and shares are now close to what I paid back when I made the company into 6% of my portfolio. With no change to the underlying investment thesis, Greencross shares continue to look quite cheap, and it is one of a few Australian retail stocks to have the tailwinds of operating in a growth industry.
Northern Star Resources Ltd (ASX: NST) shed 5% of its value, hitting $2.37 after the value of gold dropped 1.5% overnight. Gold is now down 13% for the year and, despite the weak Australian dollar boosting profits, many investors have been selling their gold miners in recent times. That said, Northern Star shares are still up 159% for the year.
The outlook for gold is uncertain going forwards, as rising US interest rates could potentially make alternative investments more appealing. On the other hand, continued global uncertainty and low interest rates traditionally drive the value of gold upwards. A highly selective approach to buying gold stocks is likely the only way to go.
Finally, Woodside Petroleum Limited (ASX: WPL) shares dropped 3.8% to $29.46 in trade today, after the Brent Crude oil price dropped 3% overnight. Although they're down some 10.5% for the year, Woodside shares have remained remarkably resilient in the face of a 60% decline in the value of oil, partly thanks to its massive dividend and strong cash flows.
With that said however, even BHP Billiton Limited (ASX: BHP) shares took a while to come unwound after the value of iron ore dropped, and I think Woodside shares have the potential to fall a lot further.
