Australian shares are trading significantly higher today on news that Greece could be nearing an agreement on its debt situation which has improved the market's sentiment considerably. The benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has lifted 1.4% as a result while the broader ALL ORDINARIES (Index: ^AXAO) (ASX: XAO) rose 1.2%.
Although the gains have been widespread these four companies have failed to fire:
Arrium Ltd (ASX: ARI) has plunged just over 5% after the iron ore price fell 2.2% to US$60.02 a tonne, according to the Metal Bulletin. As is the case with all iron ore miners, Arrium relies on higher iron ore prices to generate sufficient earnings. While it could be profitable at today's price, Goldman Sachs believes iron ore will trade below US$50 a tonne by the end of the year which could prove disastrous for the miner.
FlexiGroup Limited (ASX: FXL) has seen 6.1% wiped from its share price to trade at $3.22 after the shock resignation of Chief Executive Officer, Tarek Robbiati, who will step down from his position in the second half of 2015. The company has grown strongly under his leadership and investors are likely pondering its future without him at the wheel.
Flight Centre Travel Group Ltd (ASX: FLT) plummeted nearly 15% shortly after midday after the travel agency group booked an earnings downgrade. The company now expects to achieve an underlying profit before tax between $355-$365 million, the mid-point of which is at the bottom of the company's targeted range of $360-$390 million. The market may well have overreacted, meaning that today's loss could be a great buying opportunity for long-term investors.
Cover-More Group Ltd (ASX: CVO) has also been impacted by Flight Centre's downgrade, falling 7.4% to trade at just $2.30. Flight Centre is a major distributor of Cover-More's products (travel insurance and medical assistance) so a decline in sales for Flight Centre is usually seen as bad news for Cover-More. Again, this may have been another market overreaction, giving long-term investors an opportunity to stock up at what I believe could be a reasonable price.
