The Australian stock market has fallen 1.3% lower in afternoon trade today perhaps as investors worry about the impact of the accelerating falls in house prices across major capital cities such as Sydney and Melbourne. The weakness across the market is fairly broad-based, with some companies even hitting 52-week lows for various different reasons.
So let’s take a look at three businesses that recently hit 52-week lows and consider what might be behind the share price falls.
FAR Ltd (ASX: FAR) is an oil and gas explorer focused on opportunities in West Africa and Senegal in particular. It has been heavily hyped in the past and boasted of two “world class” oil discoveries in offshore Senegal. It also claims to own offshore blocks in Gambia that contain more than 1 billion barrels of oil according to previous estimates. The excitement around its claims has seen the share price reach as high as 14 cents and a more than $700 million valuation. However, as oil prices and the excitement has faded the stock recently hit a 52-week low of 6.5 cents.
Ainsworth Game Technology Limited (ASX: AGI) shares hit a 52-week low of 74 cents today after the pokie or gaming machine business recently blamed “intense competition” for dragging down its FY 2018 result. In particular it also warned that revenues and profit before tax are expected to be “materially lower” in the first half of FY 2019 compared to the prior corresponding half. The stock is now down around 70% over just 2018.
Donaco International Ltd (ASX: DNA) shares are down 16.4% to a 52-week low of 9.1 cents per share after the Cambodia and Singapore casino and hotel operator warned that trading had been hit in recent months by a number of factors. These include a “Chinese crime syndicate” scaring off punters from its North Vietnam casino and “illegally operating” competing casinos popping up in Cambodia.
These are the kind of risks when it comes to investing in South East Asian casinos as the shares are down around 66% over just the past year.
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Motley Fool contributor Yulia Mosaleva has no position in any of the stocks mentioned. 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 Scott Phillips.