3 Stocks that plunged on ASX – National Australia Bank, Sirtex Medical and Vocus Group

National Australia Bank Ltd

NAB Details
·         Trading ex-dividend: National Australia Bank Ltd (ASX: NAB) stock lost over 3.5% on May 16, 2017 as the group traded ex-dividend. Moreover, post the federal budget, a major bank levy is being introduced on Authorized deposit taking institutions (ADI) with licensed entity liabilities of at least $100 billion starting from July 1^st. This levy will be applicable to NAB as well.

·         Recommendation: We believe NAB can sail through well to cater to the regulations at the back of some internal strategies; though, this would require a wait and watch approach during the coming months. We give a “Hold” recommendation on the stock at the current price of $ 31.50

Sirtex Medical Ltd

SRX Details
·         Fluctuating stock sentiment: Sirtex Medical Ltd (ASX: SRX) stock lost over 4.2% on May 16, 2017 owing to some softness in sentiments again creeping in. SRX, in the month of April, revealed that the Primary Endpoint of an Overall Survival (OS) benefit (superiority) for SIR-Spheres versus sorafenib was not met. On the other hand, SIR-Spheres have been identified to offer a higher tumor response, a better tolerance, with less treatment related adverse events and a better quality of life over time as compared to sorafenib. Quality of Life (QoL) assessments indicated patients treated with SIR-Spheres maintained their health status over the duration of the SARAH study, while patients receiving sorafenib reported a significant and sustained decline.

·         Recommendation:Despite the temporary pressure, we maintain our “Hold” recommendation on the stock at the current price of $ 14.84

Vocus Group Ltd

VOC Details
·         Weak guidance hitting the stock hard: Vocus Group Ltd (ASX: VOC) stock lost over 3.9% on May 16, 2017 continuing the drag witnessed since the time the group downgraded its forecast. The group now expects FY17 revenue to be ~$1.8 billion against the earlier forecast of over $1.9 billion. FY17 underlying EBITDA is also now expected to be in the range of $365-375m against the forecast of $430-450 million.

·         Recommendation: The investors need to note that the downgrade is due to an accounting review of the negotiated contract terms on a number of large projects. The positive cash flow benefit of these contracts will be about $45m which has been expected to be reflected across FY17 and FY18. We give a “Hold” recommendation on the stock at the current price of over $ 2.35
 

Revenue and EBITDA Breakdown (Source: Company Reports)

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