ASX Hot Stocks: Virgin Australia, WorleyParsons and Wesfarmers

ASX rises 0.3%, driven by the miners

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 17, 2013 4:24 pm AEST

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has closed higher, gaining losing 0.3% to 5,180. The miners made headway on Friday, the big losers on the day being the Australian dollar, trading as low as 97.5 U.S. cents, gold and retailers after a profit warning from Target.

Here's why these three stocks are hot or not right now…

Massive conglomerate Wesfarmers (ASX: WES) closed down 2.9% today at $42.93, after issuing a profit warning for its chain of Target stores. The struggling chain's full year earnings could drop by as much as 43% on lower sales, discounting to clear excess inventory, a rise in shoplifting, and restructuring costs. In a release, Wesfarmers said it expects the chain to post operating profits between $140 million and $160 million for the full year versus the $244 million it posted the previous fiscal year.

WorleyParsons (ASX: WOR) joined many of its mining services brethren in posting losses on the back of earnings downgrades over the past week or so. Today was Worley's turn, its shares falling $2.79 or 12.5% to $19.50 on the back of a euphemistically titled 'Trading Update'. The company's 'West Australian business' (read: mining services) was blamed for the earnings downgrade, with profits now forecast to be below last year's $346m underlying profit, compared to previously issued guidance predicting an increase. When miners sneeze, mining services come down with a serious case of the flu.

Virgin Australia Holdings' (ASX: VAH) shares rebounded 10% today to end at 42 cents, after spilling 17% on Thursday. Australia's second largest airline is experiencing turbulence after unveiling disappointing earnings guidance for the second half. Airlines are typically places where capital goes to die, so long-term investors may want to steer clear and leave this one to wanna-be stunt pilots.

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