The S&P/ASX 200 index was a strong performer again last week thanks to solid gains in the banking and tech sectors. The benchmark index finished the week 0.9% higher than where it started it at 6730.8 points.
Whilst a large number of shares pushed higher, not all were so fortunate. Four shares that failed to follow the market higher and sunk notably lower are listed below. Here’s why they were the worst performers on the benchmark index:
The Sims Metal Management Ltd (ASX: SGM) share price was the worst performer on the index last week with a decline of 11.9%. Investors hit the sell button in a hurry after the scrap metal company warned that its first half result would be down materially compared to the prior corresponding period. Management advised that this has been driven largely by the negative impact of the trade war on demand and the prices of ferrous and no-ferrous metals.
The Nufarm Limited (ASX: NUF) share price wasn’t far behind with a decline of 9.3% despite there being no news out of it. However, its shares have been under significant pressure this year after short sellers took an interest in it. They appear to have been targeting the agricultural chemicals company due to concerns over the impacts of droughts on its profits and its sales of the controversial glyphosate herbicide. At the last count, Nufarm was the most shorted share on the ASX.
The Speedcast International Ltd (ASX: SDA) share price underperformed last week with a 6.4% decline. The global satellite communications provider’s shares had risen strongly over the previous two weeks after rebounding from a severe sell off. This was driven by a very disappointing half year update last month which revealed a shocking statutory loss after tax of $175.5 million and a massive $625 million debt.
The Inghams Group Ltd (ASX: ING) share price was also off form and sank 6.1% lower last week. A bearish broker note out of UBS could have been the catalyst for this decline. According to the note, the broker retained its sell rating and $3.10 price target on the poultry producer’s shares amid concerns that rising feed costs caused by the droughts could weigh on its profits. In addition to this, UBS fears upcoming contract renewals could be made on less favourable terms.
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Motley Fool contributor James Mickleboro 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.