3 ASX stocks that fell by more than 3% yesterday

The ASX was flat, but that was no refuge for this trio

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 June 7, 2012 11:03 am AEST

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) rose 0.3% to close at 4,055.3 yesterday, on news that Australia's economy grew 1.3 % in the three months to March 2012, well above economists' predictions for 0.6% growth.

These three stocks tumbled by more than 3%.

Bradken Limited (ASX: BKN) slipped 4% to close at $5.34 on news that a lawsuit has been filed in the US against private equity firm Castle Harlan over the sale of a Canadian business to Bradken. Castle Harlan paid $190m for Norcast Wear Solutions, a mining supplies manufacturer, in July 2011, only to sell it on to Bradken, just seven hours later for $217m.

Swiss firm Pala Investments (Pala) filed the lawsuit against Castle Harlan, after taking action against Bradken in Australia last month. Pala is seeking at least US$25m, alleging that the company had engaged in bid rigging. Bradken has denied the allegations, but uncertainty of the outcome is weighing on Bradken's shares, and likely will until the case has been settled.

Incitec Pivot Limited (ASX: IPL) fell by 3.7% to close at $2.64, reversing most of the gains from the day before. The stock has now fallen 20% in the last month, since the company reported a 13% fall in first half profits to March 2012. Investors are still worried about the outlook for the company's fertiliser business, which reported a 56% slump in earnings before interest and tax (EBIT).

Karoon Gas Australia Limited (ASX: KAR) swooned by 3.3% to close at $4.17, partly erasing the gains it made on Tuesday. The company's shares have fallen by more than 36% since late March 2012. Karoon expects to start producing revenues from its oil and gas projects in 2017/2018. Some investors are suggesting Karoon's projects have so much potential that it could be the next Woodside Petroleum Limited (ASX: WPL). Woodside is currently trading around $32.17. Analysts are also bullish about Karoon, with 10 out of 10 analysts having a 'buy' rating on the stock. The problem for investors is that if the company doesn't meet its potential, the share price is likely to sink like a stone.

Other losers include QR National Limited (ASX: QRN), down 2.9% on news it was continuing its restructure and sacking at least 500 workers; and Cabcharge Australia Limited (ASX: CAB) down 2.7%, as a review of Victoria's taxi industry suggested changes that could affect Cabcharge's dominance of the sector.

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Motley Fool contributor Mike King owns shares in Woodside Petroleum. 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). Authorised by Bruce Jackson.

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