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Why TPG, FAR and Southern Cross shares are lower today

The S&P/ASX 200 Index (INDEXASX: XJO) is up by 0.50% at the time of writing, with a number of companies displaying solid share price gains.

However, here are 3 ASX shares that haven’t fared so well. Let’s dig into what might be behind their share price falls.

TPG Telecom Ltd (ASX: TPM)

TPG shares surged yesterday after the Federal Court announced its judgment in relation to the proposed merger between telco companies Vodafone Australia and TPG. The court decided to overturn the ACCC’s initial decision it made in last May and approved the merger.

The new entity will now potentially be in a strong position to compete with the two current largest telcos in Australia, Telstra Corporation Ltd (ASX: TLS) and Optus, in both the fixed broadband and mobile segments of the market. In particular, the merger will place Vodafone in a much stronger position to roll out a competitive 5G offering.

However, TPG’s are sinking lower today, down by 3.4% at the time of writing to be trading at $7.87. I believe that today’s falls are most likely due to investors taking some profit off the table on the back of yesterday’s 10% gain.

Southern Cross Media Group Ltd (ASX: SXL)

The Southern Cross share price is down by 4.3% so far today and is currently trading at $0.775. The fall doesn’t seem to be linked to any recent announcement, but rather appears to be part of a recent downhill share price trend.

Southern Cross Media’s share price dropped to a 5-year low in October last year, triggered by a downgrade in guidance. Management revealed that weak media markets had seen revenue in 1QFY20 down 8.5% compared to the prior year, with both audio and television segments declining.

The company is focused on maximising its market share while maintaining cost control across all divisions. Advertising markets, however, remain very challenging in Australia.

According to CommSec, Southern Cross shares are currently trading on a low price-to-earnings ratio of 9.64 and offer a very high dividend yield of 8.6%, fully franked.

The company is set to announce its interim group results on 20 February 2020. It will be interesting to see if Southern Cross will still be positioned to offer this high yield.

FAR Ltd (ASX: FAR)

FAR is an Australian oil and gas producer with assets in East Africa, West Africa, and Australia; and interests in Senegal, Guinea Bissau, and Kenya.

FAR has had a poor run on the ASX since early July last year when its share price reached a 52-week high of $0.081. Since then, FAR shares have tumbled a massive 61% to be currently trading at $0.0315. So far today, its share price is down by 7.4%.

Today’s decline appears to be linked to an ASX announcement that was released this morning. In the release, it was stated that the International Court of Arbitration of the International Chamber of Commerce had rejected FAR’s pre-emption claims related to a case back in 2019.

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Motley Fool contributor Phil Harpur 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.

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