The S&P/ ASX200 (ASX: XJO) is 0.3% higher in lunchtime trade today in a small recovery after a big 2.25% fall yesterday took Australia’s benchmark share index close to a two-year low. The negative sentiment is dragging plenty of popular shares down a long way to leave some investors deep in the red.
Let’s take a look at what might be behind the share price action of some of today’s biggest losers.
The Galaxy Resources Limited (ASX: GXY) share price is down 4% to $2.36 even though the lithium miner with operational interests in Argentina, Western Australia and Canada released no news to the market. Spot lithium prices are opaque as the commodity is not exchange traded so the lithium miners’ share prices can be volatile based on the variable reports of achieved lithium prices. According to Galaxy global demand for lithium will be 5x greater by 2025 thanks mainly to the rise of electric vehicles. It looks well placed to capitalise if lithium prices do soar.
The Automotive Holdings Group Ltd (ASX: AHG) share price is down 3.4% to $1.42 today and has now lost half its value over just the last 6 months. This shocking performance of Australia’s largest car dealership network operator is mainly due to a profit downgrade issued on November 23 with the group now expecting operating profit between $56 million to $59 million. Management blamed the downgrade on weak economic conditions, including falling house prices putting off people buying a new car.
The Donaco International Ltd (ASX: DNA) share price is down 11% to 3.9 cents and is now down around 90% over the course of just 2018. It seems investors are losing all confidence in the South East Asian casino operator after it warned criminal gangs were putting off punters from taking their chances at its Vietnamese casino. It’s also locked in a legal dispute with a competitor it claims breached non-compete clauses in a contract.
The QBE Insurance Group Ltd (ASX: QBE) share price is down 4.5% to $9.92 despite the group telling investors today to expect higher profits in 2019. It seems shareholders are upset that its CEO has not come up with more than $130 million in net cost savings to be delivered by 2021. The group is also targeting an expense ratio around 14% in 2021, which would be a 1.5% improvement from current levels and includes anticipated premium rises. However, it seems this is not enough for demanding investors.
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Motley Fool contributor Yulia Mosaleva has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Automotive Holdings Group Limited. 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.