The Motley Fool

Why the Amaysim share price crashed 10% lower on Monday

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.

Alternatively, here are three blue chips with growing earnings and dividends that could be great options for investors.

Our Top 3 Blue Chip Shares for 2019 – NOW AVAILABLE!

You’re invited! For a limited time, The Motley Fool Australia is giving away an urgent new investment report detailing our 3 TOP BLUE CHIP SHARES to own in 2019.

So if you like trustworthy, stable, high-performing companies that pay fat fully franked dividends – we’ve got you covered!

Stock #1 is a beloved old Australian company turning its attention to high-margin businesses... and rapidly returning cash to shareholders with its hefty dividend...

While Stock #2 is an online powerhouse that’s rapidly gaining market share all around the globe... poised for years (or even decades) of tremendous growth...

Even better, Stock #3 offers a whopping 6.5% grossed-up dividend! Which beats the rates on term deposits right out of the water – and offers the potential for capital gains, too.

You can discover all three shares inside our new report right now. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a LIMITED TIME ONLY!


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.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

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 near a 52-week low all while offering a 2.8% fully franked yield…

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

See for yourself now. Simply click 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.