The ALL ORDINARIES (INDEXASX: ^AXAO) ended the day flat today, up just 0.03% to 5,157 points.
These four shares all fell behind, however, for a multitude of reasons:
OceanaGold Corporation (ASX: OGC) dropped 7.2% to $2.68 on no news, despite the price of gold rising 1% overnight. OceanaGold shares have been quite volatile this year, along with many other gold miners, as investors attempt to use the companies to hedge against risk and gain exposure to shifting AUD/USD values.
Going forwards, gold miners face much uncertainty as there isn’t a clear driver for the value of precious metals in a world where economic activity is lacklustre and US interest rates are rising (increasing the attractiveness of investments other than gold).
ResMed Inc. (CHESS) (ASX: RMD) lost 3.9% to $7.51 on no company-specific news. Interestingly, the company could be some 20% undervalued according to several analysts who expect new products – especially home testing and more comfortable devices – to deliver steadily increasing, recurring revenue over the long term.
In this new era of a weak Australian dollar, investors may want to look closer at ResMed, which makes most of its money in the US.
Cloud software licensor Rhipe Ltd (ASX: RHP) fell 5.7% to $1.32, having lost some 15% since last month’s annual general meeting and trading update. Despite posting month-on-month sales growth for the first quarter of 2016, it seems that investors were disappointed with revenues that grew 25% compared to the same time last year.
Rhipe is expecting to launch several new products in 2016, and this seems likely to continue its sales growth momentum. Like ResMed above, Rhipe could be worth a closer look.
Austal Limited (ASX: ASB) also fell 5.7% to $1.47 as investors continue to revise their expectations for the stock downwards after a recent market update indicated that the company was experiencing margin pressures in its US shipbuilding projects. Despite being a successful business, Austal has fairly slim profit margins, and the margins from its US shipbuilding business are forecast to be in the region of 4.5% to 6.5% this year. This could have a bigger impact than some readers might suspect.
There is also some uncertainty regarding the company’s prospects, with Austal relying on future contract wins to guarantee its revenue stream.
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Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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