Although the All Ordinaries index is racing materially higher this month, not all shares have been able to follow its lead.
Here’s why these ASX shares are taking a tumble in November:
The Kogan share price has tumbled a disappointing 21% lower since the start of the month. This ecommerce company’s shares have been caught up in a seismic rotation by investors out of COVID winners and into value shares. In addition to this, a broker note by UBS earlier this month hasn’t helped investor sentiment. While UBS has retained its neutral rating on its shares, it has reduced its price target from $22.00 to $18.00. The broker has concerns that recent gross margin strength is unsustainable.
McPherson’s Ltd (ASX: MCP)
The McPherson’s share price has lost 16% of its value in November. This decline appears to have been triggered by a recent first quarter update by the health, wellness and beauty products company. Although it recorded a 4% increase in sales to $49.7 million, its profits were wiped out by a hefty $5.7 million non-recurring provision. This was driven by the write down of its hand sanitiser inventory. Management advised that demand for it has dissipated and the supply base for these products has become much more competitive. As a result, the company has been left holding excess quantities of hand sanitiser inventory.
Silver Lake Resources Limited (ASX: SLR)
The Silver Lake Resources share price has been a poor performer and is down 16% since the start of the month. Investors have been selling Silver Lake and other gold miners after positive COVID-19 vaccine developments weighed heavily on the gold price and other safe haven assets. This has led to the S&P/ASX All Ordinaries Gold index (a gold miner index) losing over 8% of its value this month.
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Returns as of 6th October 2020
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 Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com ltd. 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.