3 Stocks Dropping Like A Stone – FIG, ADX And DNA

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With the trade fears looming over the investors and bond markets sending negative signals, the Australian share markets are declining. Despite a rally during the day, S&P/ASX 200 is at a 22-month low. Three stocks which fell flat are discussed herein.

FREEDOM INSURANCE GROUP LTD (ASX: FIG) – It is developing a customer remediation program after the board has completed its strategic review process. Company’s net revenue, customer numbers and in force premiums all increased in the 2018 financial year. Contributing to an increase in the net present value of trail commission on net revenue was $64.1 million and premiums increased to $124.6 million. Around 11% lower than the 2017 financial year due to lead performance issues in the first half, the financial year’s EBITDA was $18.7 million in 2018 as a result of which Net Profit After Tax of $13.2 million declined 6% on the previous year. The company announced the proposed acquisition for $65 million of St Andrew’s Insurance from the Bank of Queensland. The share price of the stock had gone down by 47.273% to $0.029. The stock has an attractive P/E of 1.000 and earnings per share (EPS) of 0.055 AUD.

ADX ENERGY LTD (ASX: ADX) – By paying £375,940 to Danube under the subscription agreement date 1 December 2017 the company has announced that Reabold Resources Plc has agreed to exercise its option to subscribe for 375,940 ordinary fully paid shares in the capital of Danube Petroleum Limited. At the end of half year June 30, 2018 the company had cash and cash equivalents of $1,472,524 while as at September 30, 2018 cash was of A$2.84 million with no debt facility represent a decent balance sheet. The company also reached the completion of a placement to raise $750,000 which consists of 75,000,000 new shares at 1.0 cent per share to raise gross proceeds of $750,000. The stock price of the stock had gone down by -23.077% to $0.010 which is very near to its 52-week low.

DONACO INTERNATIONAL LIMITED (ASX: DNA) – During the 2018 financial year, the company recorded a statutory loss of $124.5 million, compared to a profit of $31 million which was in the previous year due to a noncash impairment charge of $143.9 million. EBITDA for the year fell 4% to RMB71.8 million dues to a lower win rate, but the normalized EBITDA improved by 38% to RMB151.3 million. No FY18 dividend is payable with regards to the capital management. The company has a robust balance sheet with $47.1 million and net debt to equity ratio of 6.3% which is lower as compared to the previous year of 8.7%. The company also has a high dividend yield of 7.94%. However, the stock price of the company had gone down by -15.873% to $0.053 which is near its 52-week low.


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