Barring a strong finish to the year on Tuesday, the S&P/ASX 200 index looks set to record a small monthly decline.
Four shares that have acted as a drag on the market in December are listed below. Here’s why they are ending the year on a disappointing note:
Jumbo Interactive Ltd (ASX: JIN)
The Jumbo Interactive share price has been the worst performer on the ASX 200 in December. Month to date the online lottery ticket seller’s shares are down 25.2%. The catalyst for this was the release of an underwhelming trading update earlier this month. Although Jumbo expects to post a 24% increase in revenue in the first half, its profit growth is expected to be much slower at 13%. This has been caused by a temporary increase in business development costs. Its margins are expected to return to normal levels in FY 2021.
Smartgroup Corporation Ltd (ASX: SIQ)
The Smartgroup share price has also been out of form in December. Its shares are down 22.5% month to date. Investors have been selling the salary packaging and fleet management company’s shares after the release of a profit warning. Due to changes by its insurance underwriting partner, management warned that the earnings from insurance product sales are expected to be impacted in FY 2020. It is forecasting a post-tax impact of $4 million.
Whitehaven Coal Ltd (ASX: WHC)
The Whitehaven Coal share price has fallen heavily in December and is down 17.1% month to date. The coal miner’s shares were sold off after it downgraded its FY 2020 guidance. Whitehaven Coal was forced to downgrade its guidance after its production was impacted by challenges sourcing experienced and skilled operators for its largest operation, Maules Creek. Also impacting production were dust-related events.
Perenti Global Ltd (ASX: PRN)
The Perenti Global share price has underperformed and is down 13.6% month to date. Investors were selling the mining services company’s shares after it downgraded its underlying net profit after tax guidance for FY 2020. Perenti Global, previously known as Ausdrill, downgraded its underlying NPAT guidance from $140 million to between $115 million and $120 million. The catalyst for this downgrade was the loss of a key equipment hire contract with Ghana Manganese Company. Management pointed out that the loss of the contract was caused by production caps and was not performance related.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia has recommended Jumbo Interactive 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.