The Australian share market may have recently hit an all-time high, but not all shares have enjoyed such a good run.
Three shares that have been crushed in 2019 are listed below. Here’s why they have been sold off:
The Citadel Group Ltd (ASX: CGL) share price has sunk 35% lower since the start of the year. Investors have been selling the information management specialist’s shares due to its very disappointing performance in FY 2019. At its last update the company warned that its earnings would be down materially year on year due to delays in customer project extensions and a lower than usual increase in customer spend in the fourth quarter. Management expects EBITDA to be in the range of $22 million to $24 million, compared to FY 2018’s EBITDA of $34 million. Whilst this is disappointing, I think its shares are attractively priced at the current level.
The Costa Group Holdings Ltd (ASX: CGC) share price has been a very disappointing performer and has recorded a decline of 48% year to date. Investors have been selling the horticulture company’s shares due to a series of guidance downgrades because of tough trading conditions and pricing pressures. Whether the worst is over is debatable, so I’ll be watching Costa carefully during earnings season and would suggest that investors sit tight and wait for an update on trading conditions before making a move.
The Syrah Resources Ltd (ASX: SYR) share price has been one of the worst performers on the Australian share market this year with a decline of 42.5%. The graphite producer’s shares have been under significant pressure due to concerns over weakening prices of the battery-making ingredient and higher than expected operating costs. Adding to the selling pressure was Syrah’s decision to undertake a capital raising at a material discount to its share price at the time. One positive for the company is that short interest has dropped significantly in recent weeks. This could be a sign that short sellers believe its shares have bottomed now.
Instead of Syrah I would be buying one of these dirt cheap shares instead.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia has recommended Citadel Group Ltd. 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.