Just once I'd like an up day please. Not that I mind the chance to pick up some of my favourite stocks at cheaper prices, but day after day after day of negative news is depressing.
Today was more of the same – a flat US market equates to fall in Australian market. The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) dropped 0.2%, while the S&P/ASX Small Ordinaries (Index: ^AXSO) (ASX: XSO) posted a rise of 0.1%, again outperforming its big brother.
Here's our view on four stocks that saw their share prices crunched…
UGL Limited (ASX: UGL) dropped 55.3%, or $2.92, to $2.36, but don't be too alarmed if you own shares in the contractor and engineering firm. The company has sold off its property management unit DTZ, and investors will receive $2.94 as a return of capital and 6 cents as an unfranked dividend for a total of $3.00 per share. UGL shares went ex-capital return and dividend today, with investors set to receive the proceeds into their bank accounts on November 27.
BC Iron Limited (ASX: BCI) lost 10.3% to close at 65.5 cents, continuing its trend of falling this year in concert with the sinking iron ore price. Shares in BC Iron have lost 87% in the past year. Overnight, the benchmark commodity price hit five year lows of US$75.10 per tonne, and futures markets are pricing in even more falls. Even at that price, it's doubtful that many junior miners will be breaking even.
Fortescue Metals Group Limited (ASX: FMG), another iron ore miner followed suite and dropped 6.6% to close at $2.97. While Fortescue is Australia's third-largest iron ore miner, it too has relatively higher production costs, compared to the majors, plus a substantial lump of debt that needs to be paid back. Without the cash flow from higher iron ore prices, Fortescue may struggle.
Paladin Energy Ltd (ASX: PDN) fell 7.1% to 39 cents, continuing its volatile trading pattern over the past few weeks. News that Japan was restarting some of its nuclear reactors was a positive for the company, as uranium prices jumped 14% last week. But the abundance of cheaper fuels like oil and gas, and the rising competitiveness of renewable energy suggests this could be a short term bounce.
