3 stocks that dragged on the market today

ASX ends flat, but these three companies fell

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 October 23, 2012 5:32 pm AEDT

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) ended flat, to close at 4,543.1, following a similarly flat performance overnight from Wall Street.

The Dow Jones Industrial Average added just 2.4 points, while the S&P 500 index rose just 0.04%, following a late rally into the end of the session. Our market rose above 4,561 in early trade, but then fell steadily throughout the day to end virtually unchanged.

The Australian dollar was steady against the greenback, buying 103.2 US cents.

These three stocks had a disappointing day.

SMS Management and Technology (ASX: SMX) tumbled 23.4% to end at $4.95, after the IT company was caught up in the aftermath of cancelled resources projects. A multi-billion dollar resources project was deferred (BHP's Olympic Dam?), lower demand from a Hong Kong client and weak demand from the ICT and Federal government sectors has seen the company's growth slow dramatically in the last two quarters.

WorleyParsons Limited (ASX: WOR) fell 6.2% to close at $25.33. At its Annual General Meeting, the company announced that it expected earnings in the first half of the 2013 financial year to be similar to the previous year's result, with growth weighted to the second half. After earlier expecting good growth this year, the company has experienced increased volatility in its markets, which will make growth harder to achieve.

QBE Insurance Group (ASX: QBE) fell 33 cents to $$13.71, a fall of 2.4%, possibly on concerns about the $6.2 billion of goodwill on its balance sheet, courtesy of more than 140 acquisitions in the past 10 years. Investors may also fear that its US business is struggling thanks to a severe drought in the US, which could lead to numerous policyholder claims. Another issue the company faces is the fact it invests much of its policyholders' funds in government bonds, which earn little, if any investment income.

If you only invest in one company this year, make it our "Top Stock for 2012-13". Operating in two hot markets — one set to double by 2012, the other predicted to grow 5x over the next five years — this stock is a solid growth play that also boasts strong recurring revenue, zero debt, and lots of cash. Get its name and full research case in this brand-new FREE report.

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Motley Fool writer/analyst Mike King owns shares in QBE Insurance. 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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