Three Shares That Lost To The Market Today


Last night, the Dow Jones Industrial Average in the USA ended at a record-high as it gained 0.1% to 15,783 points. Another major market index there, the S&P 500 Index, went up by 0.1% as well to 1,772.

Unfortunately, the Straits Times Index (SGX: ^STI) in Singapore failed to take cues from the US as it fell 0.2% to 3,180 points. Within the index, there are 17 shares that ended the day in the red, compared to just eight that made some headway.

So, what are some of the shares outside the index that had lost some ground?

Super Group (SGX: S10) was one of the biggest losers in the market today with a 14% decline to S$3.57. Its third quarter earnings, released yesterday afternoon, were not well-received by the market.

And who can blame them? The instant beverage manufacturer’s sales growth had stalled as quarterly revenue grew only 2% year-on-year S$133m while profits had tumbled by 17% to S$18.7m.

In light of the company’s poor showing, there were also brokerage houses that came out with ‘downgrade’ reports. For instance, CIMB came out with a report yesterday where it downgraded the company from an ‘Outperform’ rating to a ‘Neutral’ rating.

Some might point to the downgrade as a factor for today’s price decline and it could well be true. But, it’s also important to remember, as investors, that it’s not brokerage houses that determine the prices of shares in the long-run – it’s the corporate performance of the business that matters.

On that front, Super Group does indeed have room for improvement in terms of profit-growth going forward.

Communication solutions provider Nera Telecommunications (SGX: N01) slipped 1.4% to S$0.70. Its shares have gone down by 8% from S$0.76 since its third quarter earnings release last Thursday. Revenue for the quarter had increased by 4% to S$50.1m compared to a year ago, but profits had dropped by 42% to S$3.3m.

An increase in operating expenses had quite a role to play in the profit-decline. Nera Tel’s higher headcount and costs related to the setting up of a new subsidiary in Nigeria were some of the reasons that drove up the company’s operating expenses.

Finally we have SATS (SGX: S58), which fell 2.1% to S$3.24, again on earnings-related news. The company, a provider of gateway services and food solutions for the airline industry, released its second quarter results last Tuesday. Its shares have since dropped 4.7%.

SATS’ quarterly revenue dipped by 2% year-on-year to S$452m while profits were down by 3.2% to S$48.7m. The company commented that its “operating environment remains challenging” and warned of an increase in labour costs, which would pressure its profit margins.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chong Ser Jing owns shares in Super Group.