Today was a particularly bad day for commodity producers on our local exchange. While the S&P/ASX 200 fell 1% to 5,128 points, commodity producers and a handful of others performed considerably worse.
Here’s what you need to know:
Slater & Gordon Limited (ASX: SGH) fell 7.4% to $0.75 on no news. With an aura of pessimism generally pervading the ASX at the moment, companies that are under a cloud (like Slater & Gordon) could expect to be sold off more heavily than their glossier counterparts. What Slater & Gordon shares are really worth right now is also up in the air after the withdrawal of recent earnings guidance, although it is interesting to note that one well-known research house has a price target of $2.30 on the stock.
EVOLUTION FPO (ASX: EVN) shed 6.1% to $1.34 in continuing volatility even though the price of gold remained largely unchanged according to NASDAQ data overnight. Fellow miners Northern Star Resources Ltd (ASX: NST) and Newcrest Mining Limited (ASX: NCM) also fell today, losing 6% and 2% respectively. Investors should remain cautious on gold going into 2016, as market uncertainty and rising interest rates (along with many other factors) could potentially pull the value of the metal in either direction.
Fortescue Metals Group Limited (ASX: FMG) shares also remain volatile, today losing 6% to $1.78. In the past six months, shares have traded as high as $2.50 and as low as $1.54, reflecting a wide range of market uncertainty regarding the company’s value. Fortescue has been buying back some of its bonds at a discount, making the most of its cash-flow and reducing its debt pile, but the company remains heavily in debt and vulnerable to swings in the value of iron ore. Fellow iron ore majors BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) also lost 2.2% and 3.2% respectively today.
Ardent Leisure Group (ASX: AAD) lost 6.2% to $2.11 today, erasing some of the optimism of previous days as the market’s negative start to the year battered its share price. Although shares are down 22% for the year, Ardent is making some headway turning around its struggling Health Clubs division – increasing sales and reducing member attrition – and recently posted a strong set of first quarter results. This could be a catalyst for investors who were turned off last year to take a closer look at Ardent.