Investment Solutions


Investment Solutions


Investment Solutions


Falling Knives or Potential Turnaround Plays? These Five ASX Stocks Have Shed 60% in a Year.

Rene Anthony

Wednesday, April 13, 2022

Wednesday, April 13, 2022

With volatility proving a key theme to start 2022, a number of stocks have come off their highs. But in some instances, a series of stocks have been in a downtrend for much longer.

With volatility proving a key theme to start 2022, a number of stocks have come off their highs. But in some instances, a series of stocks have been in a downtrend for much longer.

While the ASX has gained just over 6% in the last year, it’s a different story for a host of once-loved names, which have come tumbling down over recent months.

Whether it’s a shift in investor sentiment, missed expectations, swelling losses, poor investment returns or even macroeconomic factors, a number of catalysts have played a role.

We’re going to quickly cover the five worst-performing mid-to-large-cap stocks over the last 12 months and look at what has sparked each of their sell-offs. Have they bottomed, or do they have further to fall? Could any of them be potential turnaround plays for long-term investors?


Zip Co (ASX: Z1P)

It hit an all-time high of $14.53 in early 2021, and has shed around 85% of its value in the last year. Zip (ASX: Z1P), never far from controversy, headlines the list of the mid-to-large-cap companies that have taken a beating in recent times.

From concerns around rising interest rates, to a spike in bad debts, overseas hurdles, regulatory risk and action, as well as consumer advocacy targeting Zip’s sector, the buy-now pay-later frontrunner has been hit on a number of fronts. 

Management recently unveiled plans to merge the company with Sezzle (ASX: SZL) to increase the combined entity’s scale across the US, but it has been a similar story for Zip’s US-focused peer. Investors have also increasingly shied away from this sector, with Afterpay also a shadow of its former self.


Pointsbet (ASX: PBH)

A favourite during the COVID lockdown stages, and while there was a broader risk-on appetite for growth stocks, Pointsbet (ASX: PBH) has seen its fortunes change dramatically since February, 2021. Back then, the stock was sitting at around $16 per share. In the last year alone, the stock has slumped more than 75%, with the sell-off picking up momentum as investors periodically fell out of favour with growth names. 

Some of the factors that have weighed on the company include the prospect of emerging competition in key US states that Pointsbet is actively trying to gain a foothold. Furthermore, the company’s cash burn and investment in growth initiatives has prompted some shareholders to question the scale needed to build a sustainable and profitable business.


Magellan Financial Group (ASX: MFG)

Once considered among Australia’s most-successful fund managers, Magellan Financial Group (ASX: MFG) has seen a consistent period of underperformance during the pandemic, dragging its share price sharply lower by two-thirds since April, 2021.

Some of Magellan’s investment holdings, for example, Alibaba (NYSE: BABA)Netflix (NASDAQ: NFLX) and Meta Platforms (NASDAQ: FB), significantly underperformed for the portfolio. Furthermore, as a value-focused fund, Magellan largely maintained exposure to more defensive holdings after COVID roiled global markets and that has meant the company was unable to capitalise on the upside in growth stocks during 2020 and 2021.

Capping things off, the company recently lost a significant mandate with UK-based client St James’s Place, its largest institutional mandate. As a result of that event, the company also happened to experience a wave of net outflows in funds among other clients. Key personnel departures have also hit the stock, including the absence of Hamish Douglass.

Falling stock price

Platinum Asset Management (ASX: PTM)

Sinking to all-time lows this week, shares in Platinum Asset Management (ASX: PTM) are down more than 60% over the last 12 months. In a similar fashion to Magellan Financial Group, the stock’s demise has largely been brought about by the fund manager’s underperformance, which has had a knock-on effect in terms of its operations.

Whereas markets have been relatively favourable for returns since the start of the pandemic, the company’s funds under management (FUM) have continued to shrink. At the end of March, FUM was sitting at just $19.4 billion, while a year ago it was $24.5 billion. 

The performance of the company’s funds are largely in the red over the last year, also trailing internal benchmarks. This has made it harder to not only attract but maintain current clients. In addition, the popularity of passive funds and the surge in appetite for ETFs, particularly international ETFs, have weighed on the value-oriented active fund manager.


Tyro Payments (ASX: TYR)

The company may have a consistent track record in terms of updating the market with its weekly trading updates, however, payment terminals business Tyro Payments (ASX: TYR) has seen roughly 60% of its market capitalisation wiped in the last year.

One of the most distinct moves over that period came in late February this year, when the stock was savaged by more than 25% in a single trading session as the company unveiled first-half EBITDA for FY22 fell by two-thirds to $2.8 million. 

The company attributed the result to reinvestment in growth, the absence of JobKeeper benefits, wage growth, and costs associated with the acquisition of Medipass. But like some of the other names on this list, shorters have latched onto the company’s headwinds, and Tyro Payments is one of the most-shorted stocks across the ASX, likely compounding its poor showing.


Other mentions

While the above names represent a handful of stocks valued in excess of $750 million that have recorded the worst share price performance over the last year, there are certainly plenty of other high-profile names that haven’t enjoyed a good run of late.

Shares in AI data firm Appen (ASX: APX) are down 60% over 12 months, driven by a series of earnings downgrades amid rising competition. The company’s work-in-hand order book has also shrunk over the last year, with one of its biggest headwinds being privacy changes Apple made to its iOS platform that have impacted Appen’s biggest customers.

Elsewhere, rumours regarding a takeover bid for EML Payments (ASX: EML) have given it some momentum lately, but over the last year it has been rocked by almost 50%, initially by regulatory issues from the Central Bank of Ireland, and more recently transaction volumes amid Omicron and a rotation out of growth stocks.

In the case of A2 Milk (ASX: A2M), down 44% year-on-year, the dairy marketer is still on the outer with the daigou channel no closer to reopening and its business turnaround plan proving slow work. 

And finally, the likes of Ansell (ASX: ANN) and Fisher & Paykel (ASX: FPH) are both down around one-third versus a year ago, struggling to replicate the success they enjoyed at the start of the pandemic amid their role in treating COVID, while supply chain issues have recently hit their margins.

Important disclaimer: SelfWealth Ltd ABN 52 154 324 428 (“Selfwealth”) (AFSL 421789). The information contained on this website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser and/or accountant. Taxation, legal and other matters referred to on this website are of a general nature only and should not be relied upon in place of appropriate professional advice. You should obtain the relevant Product Disclosure Statement for any product mentioned and consider its contents before making any decision.