Unfortunately for its long-suffering shareholders, the Amaysim Australia Ltd (ASX: AYS) share price was the worst performer on the All Ordinaries index on Monday ahead of steel producer BlueScope Steel Limited (ASX: BSL) and outdoor advertising company oOh!Media Ltd (ASX: OML).
The junior telco company’s shares finished the day 10% lower at 62.5 cents, leaving them within just two and a half cents off their all-time low.
This means that Amaysim’s shares are now down a disappointing 30% since the start of the year.
Why did Amaysim’s shares crash lower?
Although there was no news out of the company on Monday, investors have been heading to the exits in their droves all year due to its poor performance in FY 2019.
In the first half of FY 2019 the company posted a 5.6% decline in revenue to $263 million and a net loss after tax from continuing operations of $4.8 million.
The majority of this weakness came from its key mobile business which reported a 4.6% decline in underlying EBITDA to $10.6 million on net revenue of $108.0 million.
At the time, management explained that: “The 1H19 results included a strong performance in energy offset by a softer half for mobile, which continues to be under pressure from intense competition.”
And with Telstra Corporation Ltd (ASX: TLS) continuing to report intense competition in the mobile sector, I suspect investors believe Amaysim will release another disappointing report when it releases its full year results next week.
Should you buy the dip?
Whilst its shares could prove to be good value at the current level, I would suggest investors wait for the release of its results before considering an investment.
In time meantime, I continue to believe that Telstra would be a good option for investors looking for exposure to the telco sector.
5 stocks under $5
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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.
- Why the Freedom Foods share price will be suspended until 30 October – July 8, 2020 4:57pm
- Why PolyNovo and this ASX mid cap share could be future large caps – July 8, 2020 4:46pm
- Forget term deposits and buy these strong ASX dividend shares – July 8, 2020 4:27pm