2 Market Darlings That Have Fallen On Hard Times

There are stocks that soar and then crash. Some manage to regain their past glories while others seem like they never can. Let’s take a look at two former “market darlings” that have crashed and see if it’s really all that bad for them now and if there’s a chance for them to shine once more given time.

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Casino and resort operator Genting Singapore PLC (SGX: G13) was a high-flying stock not too long ago. From a low of S$0.36 in 2008, Genting Singapore’s share price had soared by over 500% to more than S$2.20 in 2010. But since then, Genting Singapore’s shares have embarked on a protracted decline. Today, shares of the company trade at just S$0.71 each.

From what I see, the main concern about Genting Singapore’s business at the moment is the slowdown in the entire gaming industry in Asia-Pacific, brought on by a decline in spending from Chinese tourists. Recent data from Macau’s casinos is a good representation of the situation.

Yet, there are still some positives with Genting Singapore. It continues to generate positive free cash flow and has an impeccable balance sheet with a net cash position of S$3.4 billion.

Diamond in the rough

When it comes to stocks with multi-bagging gains in Singapore’s stock market over the past decade, it’s hard to top Sarine Technologies Ltd (SGX: U77). From a 2008 low of less than S$0.10 to a peak of over S$3.10 in 2014, Sarine Technologies’ shares had seen staggering gains of more than 3,000%. At its peak, the company had a market capitalisation of more than S$1.0 billion.

Sadly, in 2014, the diamond industry was hit with a massive over-supply issue, which affected many diamond manufacturers. This has indirectly hit the business of Sarine Technologies as the company is a provider of unique equipment and services to diamond manufacturers.

Sarine Technologies’ revenue has fallen from a quarterly revenue peak of US$24.7 million in the second-quarter of 2014 to just uS$9.5 million in the third-quarter of 2015. The company had also suffered its first quarterly loss in the third-quarter of 2015 since 2009.

But interestingly, management had recently issued a press release, stating that although the diamond market is still struggling, the company’s seeing some improvement in its business and industry conditions. Sarine Technologies’ shares are currently exchanging hands at S$1.39, down by nearly 60% from its 2014 peak.

Foolish Summary

Genting Singapore and Sarine Technologies are two former “market darlings” that have seen their shares soar, only to then fall down to earth. But, with the former’s strong balance sheet and the latter’s unique technologies, what do you think are the odds of both firms being able to regian their “market darling” status? Thoughts? Share them in the comments section below!

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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 writer Stanley Lim doesn’t own shares in any companies mentioned.