The Motley Fool

4 small cap shares plunging on the ASX today

The S&P/ASX 300 (Index: ^AXKO) (ASX: XKO) is up 0.4%, in mid-afternoon trading, despite early falls, and losses on overseas markets overnight. And performance was pretty broad based, with most sectors in the green.

However, investors in the following 4 companies probably wouldn’t be all that happy…

Lynas Corporation Limited (ASX: LYC) share price plunged 9.9% to 7.3 cents. The rare earths miner today reported that it was unable to sustain its breakeven performance into the March quarter, after the first two quarters. Continued low rare earths prices means the company has been unable to fund improvements with cash flow, and the company has just $10m cash in the bank (non-restricted) at the end of March 31.

Adslot Ltd’s (ASX: ADJ) share price dropped 7% to 9.3 cents. Adslot offers companies the ability to control their advertising needs via its Symphony technology, and allows advertisers and publishers to work together in a more coherent form. The company is only small, but is growing revenues strongly – however cash receipts for the March 2016 quarter fell by 22% compared to the prior quarter. Compared to last year, cash receipts were up 19%, but the company has just $2 million in cash at the end of the quarter, prompting it to raise $4.6 million in capital recently.

Mobile Embrace Ltd (ASX: MBE) saw its share price fall 5.5% to 34.5 cents, despite no news from the company in more than 2 weeks. Mobile Embrace is a small technology firm that focuses on mobile payments and allows consumers to pay for goods and services via their mobile phone carrier plan. The company reported $2.6 million in net profit for the first half of the 2016 financial year in February, but trades on a fairly high P/E ratio (above 20x), suggesting the market is expecting strong growth in the years ahead. Shares can be illiquid, causing the share price to surge or sink depending on the day.

Kathmandu Holdings Ltd (ASX: KMD) saw its share price plummet 6.6% to $1.42, despite no news from the outdoor apparel retailer in the past month. After reaching $1.60 two weeks ago, the share price has slipped, and the company is still heavily reliant on its upcoming winter sales season. Much depends on the weather – with colder weather likely to spur sales, and warmer weather putting a giant hole in the company’s revenues. At current prices, Kathmandu shares appear expensive based on FY2016 net profit of NZ$30 million, which equates to a P/E ratio of around 24x.

NEW. The Motley Fool AU Releases Five Cheap and Good Stocks to Buy for 2020 and beyond!….

Our experts here at The Motley Fool Australia have just released a fantastic report, detailing 5 dirt cheap shares that you can buy in 2020.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading over 40% off it's high, all while offering a fully franked dividend yield over 3%...

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click here or the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.


Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

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.