Investing
Shocker! The UK’s ten most frightening stocks of 2013
To date, 2013 has been another strong year for UK equities, with the FTSE All Share hitting record highs and the FTSE 100 not far from doing the same.
The blue chip index has risen some 14% since the start of the year, with the All Share up 16% – both before dividends are taken into account.
With macroeconomic concerns fading into the background, however, many fund managers have been quick to point out that this year has been more of a stock picker’s market: with share prices diverging sharply rather than simply rising or fallening in tandem.
All but one of this year’s worst performing stocks, however, share a focus on commodities in common. In our annual Halloween round-up, we reveal the ten worst performers of the year so far.
Talvivaara Mining Company -76.6%
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The Finnish Nickel miner takes top spot in the list courtesy of a 19% fall today alone, prompted by news agency reports that the Finish state was considering a rescue of the company.
Struggling with both production problems and a 20% fall in the value of nickel this year, Talvivaara completed a capital raising in the summer but its future remains uncertain.
Analysts have warned the company may run out of money next year if it cannot significantly increase production.
Petropavlovsk -76.2%
Considered one of the weakest UK-listed gold miners because of its heavy debt load, Petropavlovsk has suffered in 2013 amid a slump in the price of the precious metal.
Analysts have suggested Petropavlovsk requires a higher gold spot price in order to break-even than its peers, a cause for concern given gold’s downwards movements in 2013.
Chaired by Peter Hambro, father of BlackRock resources manager Evy, the company cut its guidance for gold production last week after major floods took hold near to its Russian mines.
New World Resources -71.5%
A hard coke and coal producer focused on central European regions, New World Resources (NWR) has found itself embroiled in political problems this month.
The company’s planned shutdown of a mine in the Czech Republic mine has become a key issue in the country’s national elections.
NWR has been trying to cut costs after reporting a net loss of over £250m in the first half of 2013, prompted by a decrease in the value of its coal reserves.
Brokers including Goldman Sachs retain a sell rating on the stock.
Kazakhmys -65.7%
The Kazakh copper miner disappointed investors in August when it took $1bn worth of writedowns, reported a $960m net loss for the first half and scrapped its dividend.
The latest signs are more promising, however, with the company’s most recent results revealing a better than expected rise in copper output.
The group is also set to receive $875m in cash and 77m of its own shares after it agreed a deal to sell its 26% stake in Eurasian Natural Resources to the latter’s owners.
Kazakhmys said this summer it wanted to disassociate itself from its similarly-troubled Kazakh peer.
Hochschild Mining -65%
Another company to have suffered from precious metal problems, the silver and gold miner’s executive chairman took a 30% pay cut this year in an attempt to help restore investor confidence.
Falling spot prices and poorer production output have made life difficult for Hochschild in 2013, but the company itself is looking forward.
The miner announced a proposed equity raising of up to $96m in October, with the aim of buying out a partner in its Peruvian mines.
African Barrick Gold -55.2%
African Barrick Gold shares have had a topsy turvy year, as demonstrated by today’s 16% rise following better than expected results.
The Tanzania-focused gold miner’s share price remains well down year-to-date, however, as the familiar problem of a falling spot price and struggling production weighed on the stock.
RusPetro -53.8%
The Siberian oil and gas producer listed in London in January 2012, but has quickly fallen from grace.
The start of the year was particularly bad for the company: it fell 17% on 7 January after revealing it would miss production targets by some distance, and then fell 21% on 7 February after postponing a $350m bond issue required to repay debt and meet a funding shortfall.
The firm also lost its chief executive Don Wolcott in July. Wolcott, who pioneered the use of the controversial fracking extraction technique in Russia in the 1990s, left the company for unspecified reasons.
Evraz -53.4%
Like many of its peers, the steelmaker has been downsizing this year in a bid to cut costs. The latest such move came earlier this month, when Evraz announced it would close its steel mill in Delaware due to low demand.
Russia’s largest steelmaker added visibility over the prospects for steel production remain “low”, making it “difficult to foresee when positive changes will occur”.
SDL -50.2%
The only non-miner on the list of the All Share’s largest fallers, the translation software provider SDL delivered the latest blow to investors earlier this month, when it again lowered its outlook for the current financial year.
Shares dropped 10% as a result, but the bad news was only the latest in a long line of dismal updates: SDL’s June profit warning was its fourth in just a handful of months.
Polymetal -47.1%
Like some peers mentioned above, gold and silver miner Polymetal has sought acquisition opportunities in recent months in a bid to revive its fortunes: announcing the purchase of a Kazakh mine for $500m earlier in October.
The company has not made a large acquisition for several years, but problems with production and lower investor demand for precious metals have meant the group’s core business has struggled this year.
August saw it report a first half loss and writedown assets, while September saw analysts raise fresh fears over its dividend.