3 ASX stocks that got crushed last week

A case of 'look out below' struck these companies hard

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published May 8, 2012 10:55 am AEST

The S&P/ASX 200 index was up 0.8% last week. However, these three small cap companies managed to fall by more than 19%, despite one receiving a takeover offer and another reporting positive news.

Quickflix Limited (ASX: QFX) fell 24.1% to close at 11 cents on Friday. As the stock is thinly traded, a lack of buyers could be part of the reason.

On the 30th April, Quickflix announced that it had entered into an agreement with Microsoft to stream Quickflix movies and TV series directly to Xbox 360 consoles, in Australia and New Zealand. It appears to be adding subscribers to its streaming service at an impressive rate so far this year. Both these pieces of information should have produced a likely increase in the share price. But who said Mr Market has to be rational?

Jetset Travelworld Limited (ASX: JET) fell 20%, down 10 cents to close at 40 cents. The company is now trading on a P/E of 5.6, and paying a dividend yield of 7.7%, but looks to be a value trap. The company is caught between Flight Centre Limited (ASX: FLT), Webjet Limited (ASX: WEB) and Wotif.com Holdings Limited (ASX: WTF), as well as the airlines and other online travel agents. Jetset appears to be losing market share, as well as being squeezed by the weak economic conditions, as I outlined in this article last week.

PMP Limited (ASX: PMP) fell 16.1% to finish at 52 cents. This printing, distribution and marketing company received a takeover offer on 27th April 2012, of between 68 cents to 78 cents. It is keeping the bidder's name secret. After initially soaring from under 30 cents to over 60 cents, it appears the market has some doubts as to whether the takeover will proceed at all. Or if it does, at anywhere near the indicative takeover price.

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Motley Fool contributor Mike King owns shares in Quickflix and Flight Centre. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691).

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