The S&P/ASX 200 index continued its positive run in January. The benchmark index recorded an impressive monthly gain of almost 5% during the month.
Unfortunately, not all shares on the index performed as positively. Here’s why these were the worst performers on the S&P/ASX 200 index in January:
The Nearmap Ltd (ASX: NEA) share price was the worst performer on the index last month with a massive 33.3% decline. The aerial imagery technology and location data company’s shares sank lower following the release of a surprise guidance downgrade. The loss of a major contract and two churn/downgrade events led to management reducing its FY 2020 annualised contract value (ACV) guidance to the range of $102 million to $110 million. This compares to its previous guidance of $116 million to $120 million. Management stressed that the downgrade was not due to increasing competition and was down to market conditions.
The Treasury Wine Estates Ltd (ASX: TWE) share price was out of form in January and sank a sizeable 19.8% lower over the period. The wine company’s shares crashed lower after it downgraded its FY 2020 EBITS guidance. Due to tough trading conditions in the U.S. market, Treasury Wine’s first half performance fell short of internal expectation. And with management not confident that market conditions will improve quickly, it has been forced to downgrade its guidance accordingly. Treasury Wine now expects EBITS growth of 5% to 10% in FY 2020. This compares to its previous guidance of 15% to 20% growth.
The Western Areas Ltd (ASX: WSA) share price tumbled a sizeable 15.2% lower in January. This follows a sharp pullback in nickel prices in January. After being the hottest commodity in 2019, the base metal sank to a six-month low. Concerns over China’s economic growth due to the coronavirus outbreak has weighed on nickel and iron ore prices in January.
The NIB Holdings Limited (ASX: NHF) share price was sold off in January and fell 13.7%. The private health insurer’s shares came under pressure after it downgraded its FY 2020 guidance. This was due largely to an increase in claims expenses across much of the business. NIB advised that it now expects FY 2020 underlying operating profit (UOP) to be at least $170 million, with statutory operating profit of at least $150 million. Previously, the company had guided to an UOP of at least $200 million and statutory operating profit of at least $180 million.
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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 Nearmap Ltd. and Treasury Wine Estates Limited. The Motley Fool Australia has recommended NIB Holdings 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.
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