Two stocks that fell hard on ASX – Mayne Pharma Group Ltd and Flight Centre Travel Group Ltd

Mayne Pharma Group Ltd

MYX Details
· Faced subpoena from the US Department of Justice: Mayne Pharma Group Ltd (ASX: MYX) stock lost over 15.5% on November 04, 2016 as the group updated about the subpoena received from the Antitrust Division of the US Department of Justice (DOJ) regarding their marketing, pricing and sales of select generic products. The investigation is mainly on their doxycycline hyclate delayed-release tablets (generic) and potassium chloride powders. The group recently launched morphine sulfate extended-release (MSER) tablets (15mg, 30mg, 60mg and 100mg) in the United States markets and even got approval from the US Food and Drug Administration for its Abbreviated New Drug Application (ANDA), which is a generic version of MS Contin®, an opioid analgesic. MYX stock fell over 14.54% in the last three months (as of November 03, 2016) and still trading at a high P/E.

· Recommendation: Given the above, we believe that the stock is “Expensive” at the current price of – $ 1.44

Flight Centre Travel Group Ltd

FLT Details
· Weak FY17 outlook hurt the stock sentiment: Flight Centre Travel Group Ltd (ASX: FLT) stock fell over 8.04% on November 04, 2016. Despite decent ticket growth, the group’s total transaction value (TTV) year-on-year rise is expected to be lower than normal. The group expects to exceed $20 billion in TTV for the first time as compared to $19.3 billion in fiscal year of 2016. Underlying profit before tax (PBT) is forecasted in the range of $320 million and $355 million as compared to $352.4 million of prior corresponding period due to weak first half. Underlying first half PBT is forecasted to be in the range of $105 million and $120 million impacted by lower than normal TTV and revenue growth in the short-term due to cheap average international airfares. Even the currency fluctuations hurt the outlook given the British pound's scenario which led to more than $5 million in unrealised foreign exchange (FX) losses on the revaluation of forward exchange contracts. Brexit impact also hurt the UK market during first half of FY17, while upcoming Presidential elections and Zika virus's impact led to USA leisure travel market volatility. On the other hand, FLT stock has already fallen over 14.5% in the last six months (as of November 03, 2016) due to concerns of a weaker first half. The group expects a better second half performance.

· Recommendation: We give a “Hold” recommendation on the stock at the current price of - $ 30.30

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