Here are four stocks that have performed particularly poorly for the day…

NIB Holdings Limited (ASX: NHF) fell 3.3% after the health insurer announced the acquisition of World Nomads Group, which specialises in travel insurance, for a total of $95 million on an enterprise value basis. Currently trading at $3.35, NIB  shares are hovering 13.6% below their all-time high ($3.88) recorded in March this year.

Analytica Limited (ASX: ALT) plummeted 35.3% after the medical device maker announced a material capital raising. Analytica, a $16 million company focused on treating patients who suffer Stress Urinary Incontinence, intends to use the $3.7 million raised for marketing and general working capital purposes.

Fortescue Metals Group Limited (ASX: FMG) fell 5.3% to a new six-year low of $1.69 after the iron ore price crashed another 5.1% overnight. The commodity is now fetching less than US$50 a tonne with further falls expected in the near future. For a miner with high operating costs and a mountain of debt, that will come as extremely concerning news.

South32 Ltd (ASX: S32) has also fallen as a result of tumbling commodity prices. Nickel, for instance, plunged 10% in what was its biggest one-day fall in more than five years, while various other commodities also declined in value. South32's shares dropped 3.3% with the stock now fetching just $1.76 per unit.

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Analytica is a micro-cap business whose lead product is the PeriCoach System – an e-health treatment system designed to strengthen the pelvic floor muscle for women who suffer Stress Urinary Incontinence. It then gives feedback to the user via a smart phone.

Although the potential for such a system is enormous, there are also a number of challenges including the difficulty of marketing (it's unlikely to gain traction via word-of-mouth) while smart-phone usage is also far less prevalent amongst older generations.

Capital Raising

On Monday, Analytica was forced to respond to a speeding ticket issued by the ASX relating to a jump in share price on the back of unusually high volumes. The company requested a trading halt and stated that it was in advanced preparations for a capital raising.

Today, the $16 million company announced that it was raising up to $3.7 million by way of a renounceable pro-rata offer (Rights Issue), offering one new share for every two shares held at the record date. The shares will be allocated to shareholders who choose to participate at an issue price of 0.8 cents per share, which represents a 33% discount to today's price.

The funds will also be used by the company to fund marketing costs in connection with the launch of the PeriCoach System, predominantly in the USA but also in Europe, as well as for general working capital.

Should you buy?

Analytica is by no means a risk-free bet and should only be considered by the more risk-tolerant investment crowd until the company can prove its worth. Until then, investors wanting to gain exposure to the medical device industry could consider looking at alternatives such as ResMed Inc. (CHESS) (ASX: RMD) or Somnomed Limited (ASX:SOM), both of which manufacture devices for the treatment of obstructive sleep apnea.

The post Why Analytica Limited shares were slammed 29% today appeared first on The Motley Fool Australia.

Although the gains have been widespread there are a number of companies that haven't fared so well, including these five.

Ozforex Group Ltd (ASX: OFX) has been the major casualty amongst the group of Australia's 200 largest companies, even though the money transfer business reported a 52% lift in net profit for the year ended 31 March 2015, early this morning. The stock has soared more than 20% since the end of April, so it's possible investors were hoping for an even stronger result.

Independence Group NL (ASX: IGO) has extended its decline, falling a further 3.3% following yesterday's 12% retreat. The diversified miner lodged a bid worth $1.8 billion for nickel miner Sirius Resources, which investors may believe is too high a price to pay.

Notably, Sirius Resources N.L.'s (ASX: SIR) shares have also fallen 1.8% for the day. This can likely be attributed to the fact that Independence Group's bid was largely scrip-based (that is it will pay Sirius' shareholders with shares as well as cash), meaning that as Independence Group's shares fall, so does the overall value of the proposed transaction. You can read more about that here.

Analytica Limited (ASX: ALT) has plunged 25% to trade at just 1.2 cents per share and was even forced to respond to a price query from the ASX. The company has had a tough run with poor sales (compared to expenditure) and received another query from the ASX recently regarding its negative operating cash flows. Today, the company confirmed that it was in compliance with the listing rules but said that it was "aware of a small speculative advisor overnight changing his recommendation," which would likely explain the plunge.

XPD Soccer Gear group Ltd (ASX: XPD) also felt the wrath of the market losing more than 20% and wiping more than $20 million from its market value. Although the company hasn't released any specific news which would explain the drop, my colleague Mike King did highlight a potential issue with the company in an article yesterday.

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It's a conference designed to connect innovative Australian biotechnology companies and investors, who don't mind holding a little extra risk in their portfolios.

It was great to see so many CEOs and senior management personnel talk about the potential future of their companies and the exciting developments they've made to the world of medicine and healthcare.

Whilst some of the companies are not yet listed on the ASX, share market investors have ample opportunities to get involved in what could be a big part of Australia's economic future.

Below I'll share my favourite stock ideas, but first here are five key takeaways from day two of the conference.

1. There is a disconnect between valuations of US-listed biotech companies and those listed locally on the ASX.
2. The end of the mining boom and increasing investor confidence could result in a meaningful increase to the flow of capital currently directed at the listed biotech space.
3. There are a number of ambitious companies lead by highly qualified and experienced healthcare professionals, right here at our very own doorstep.
4. Investors' lack of understanding is contributing to a number of these aspiring biotech companies being significantly undervalued.

A word of warning

Junior biotech stocks are not for the fainthearted and for every big winner like CSL Limited (ASX: CSL) there are likely many dozens more which don't make it past clinical trials.

However, as was shown at yesterday's proceedings, there is a notable parallel in the risk-reward trade-off in the resources sector and the biotechnology space. But I would go one step further to suggest investing in junior biotechnology companies – whose aim it is to improve the delivery of health-related services – is much more rewarding for shareholders.

For example, even if a company does not go on to become a complete success story like Sirtex Medical Limited (ASX: SRX), the research and science behind its undertakings will likely improve other companies' chances of success.

Whether that be finding a more superior ointment for chicken pox or the cure for lung cancer, there is something much more honourable to investing in companies that could potentially have a lasting positive effect on society, rather than leaving a bunch of abandoned holes in the ground somewhere in the desert.

Some ASX stocks to keep an eye on

Even the most diehard value investors – myself included – can sometimes be impartial to the idea of taking a speculative punt on an up-and-comer, provided a well-diversified portfolio is maintained.

Some high-risk/high-reward junior biotech stocks which caught my attention were:

• Analytica Limited (ASX: ALT) – a company which is now marketing its PeriCoach product, an e-health system for women who suffer from urinary incontinence.
• Dorsavi Ltd (ASX: DVL) – is a particularly interesting company out of Melbourne which only listed on the ASX in late 2013. It has developed wearable sensors for use in elite sporting clubs, OHS environments and clinical practice.
• Immuron Limited (ASX: IMC) is currently increasing its distribution network of Travelan, a drug which helps with traveller's diarrhoea. It is also pursuing two other possible game-changing products.

But these three weren't the only companies which have enormous potential.  Biotron Limited (ASX: BIT), Bionomics Ltd (ASX: BNO) and Actinogen Limited (ASX: ACW) could also go on to handsomely reward investors willing to take on more risk – although investors should conduct their own due diligence.

Foolish takeaway

Whenever you invest in micro-cap stocks which require a number of significant 'catalysts' before becoming profitable, it's vital to go in with your eyes wide open. Do not risk more than you can afford to lose. Indeed even if a company can get through years of trials and regulatory clearance, there's still no guarantee the product will gain traction with its intended market.

To add more certainty to your investment thesis, focus on the products which offer differentiation and those which you believe can become commercially viable. The potential return versus downside risk should also be asymmetric (i.e. risking $1,000 for a potential return of $500 in five years is hardly worth it). Then determine which managers have a viable strategy in place to get the company from the lab to the customer.

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The name of the game is to find investments that have an asymmetric risk and return profile. That means you're looking for companies that have a solid chance of extreme growth but are quite unlikely to fail completely, even if that is a possibility.

One such company is Analytica Limited (ASX: ALT), a medical device maker that is expected to launch its product in Australia later this calendar year. The company has seen its share price rise over 10% in the last few days on the back of a positive market update and a broker report, albeit one paid for in part by the company.

Analytica is attempting to sell the PeriCoach, a device that is designed to assist with the strengthening of the pelvic floor muscle, because a weak or damaged pelvic floor muscle is the main cause for urinary incontinence in older women. Personally, my view is that it would be very difficult to market such a device, but a phone survey commissioned by the company suggested a decent proportion of women would buy the product, which measures their pelvic floor muscle strength, and gives feedback via a smart phone.

While the potential market for the PeriCoach is enormous, Analytica will face a multitude of challenges along the way and may require more capital at some point, so I've only taken a very small position. I wonder whether baby boomer women will use the device, or if they would prefer incontinence pads, or to exercise without electronic feedback, which is said to motivate patients.

One concern is that smart phone usage is less prevalent amongst older generations, although one positive is that smart phones are increasingly common across all generations. I find Analytica hard to value and I would recommend interested investors wait until the excitement dies down before considering a purchase.

Another interesting speculative stock, Mint Wireless Limited (ASX:MNW), has come back to earth after having its share price pumped to irrational heights last year. The company provides mobile payment systems that allow merchants and tradespeople to take electronic payments with the assistance of a portable device and a smartphone. Although the major banks offer similar systems, the application process for Mint's system is easier and the costs are more transparent.

While this is clearly a growth area, I think Mint Wireless may still be overvalued because it faces tough competition from a similar company called Quest Payments that seems to offer a similar service for slightly lower prices. For example, the EFTPOS transactions cost at least 28c with Mint, but only 25c with Quest. Perhaps Mint's best advantage is that it offers a white label solution. Indeed, it has already signed Bank of New Zealand as a white label customer.

Finally, I must mention Redflow Limited (ASX: RFX), a battery manufacturer that has seen its shares shoot up 37% in the last two days, and is now up 125% since I said it could be a big winner. In case you're wondering, I don't own shares, unfortunately. I'm not buying at the moment because I don't want to buy while sentiment is so positive.

The most recent good news is that the company has successfully charged and discharged 4 strings of 12 batteries, running through a 144kW inverter. For those of you who prefer plain English, that means that the batteries are probably suitable for storing solar energy and stabilising renewable energy powered micro-grids.

This bodes extremely well for the company because solar plus storage is likely to be cheaper than grid connected energy in many locations. Shareholders will be hoping that Redflow's batteries find a market in Europe, since the company recently signed a distribution agreement with an Austrian company.

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That's some handy profits, although I only hold medical software company Global Health, these days. I'm relying on the fact that the company is continuing to grow revenue. It was some comfort to see that one director bought some shares on market recently, even if he did fail to notify the ASX on time. Meanwhile, hopeful biotech Anteo Diagnostics still hasn't announced that company-making first deal investors are waiting for, though if and when it does, the share price should soar.

My current favourite speculative stock is Kip McGrath Limited (ASX: KME), a company that owns the eponymous tutoring franchise. The global brand is arguably undervalued by the market, and locally cuts to public school funding will make private tutoring all the more important. Like Global Health, I expect that Kip McGrath will cease to be considered speculative in the coming years, by reporting consistent profits.

Electric scooter manufacturer Vmoto has recently recorded its maiden yearly profit, and was even narrowly cashflow positive in the most recent quarterly report. Unfortunately, Director Simon Farrell has suddenly resigned for unexplained reasons and the company was put into a trading halt because it lacks the requisite number of Australian based directors. While I have reservations about management, the story is compelling because 2-stroke scooters are extremely polluting: their fumes are particularly harmful to humans (more so than car fumes). Chinese cities are keen to encourage electric scooters as a replacement.

Another speculative stock that deserves to be on your watch-list is Analytica Limited (ASX: ALT) which makes and is marketing a treatment for incontinence. Apparently, the problem is more widespread than you might think. I look forward to adding the company to my portfolio if it comes down in price. The capital raising at 2.4c was not fully subscribed, and the remaining shares will be placed (mostly to the chairman).

Part of the reason that I'm low on cash (for investing) is my recent purchase of MGM Wireless Limited (ASX: MWR), a company that specialises in mass communications, allowing schools to contact all their students instantaneously via SMS. The company is not exactly cheap at current prices, but it did recently buy another company that provides online payment and communication capability to schools, allowing parents to order lunch or sign permission slips over the internet. Though there is undoubtedly competition, the acquisition will prove positive if MGM can roll out the platform to some of its existing clientele.

Nanosonics Limited (ASX: NAN) is another interesting biotechnology company. It makes a device that can sterilise ultrasound probes more effectively than the current methods. The system can literally save lives by preventing infection. Nanosonics is a bit too expensive for me, with a current market cap of $210 million, but holds significant potential – especially at a lower price.

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