The FTSE 100 has been on a downer since early September, slumping to a 52-week low of 6,073 points on 16 October amid wailing and predictions of further collapse.
That hasn’t yet happened, and the index is back up to 6,420 points as I write these words. But some previously strong companies are struggling, as their share prices hit new lows.
Standard Chartered
A third-quarter profit warning dealt a blow to the Standard Chartered (LSE: STAN) share price on 28 October, and it ended the day down 9% to 998p. But things have been getting worse, and on 30 October the price slipped to a five-year low of 945p, before rebounding a little 953p, after authorities in the US reopened investigations into the possible withholding of evidence of Iran sanctions violations.
Forecasts are sure to be downgraded, but the big question is whether the shares are oversold. Current estimates suggest a P/E of a meagre 8 for 2015 with a dividend yield of nearly 5% forecast, so there’s plenty of room for a downgrade there while still keeping a modest P/E. But it might take a management shake-up before sentiment improves.
Rio Tinto
The mining sector has been bearish for some time now amid low commodities prices and fears of overproduction. And that’s helped push Rio Tinto (LSE: RIO) down to a new 52-week low of 2,915.5p on Thursday, before picking up a few pennies to 2,929p.
That gives us forward P/E valuations of under 10 for this year and next, and it does raise the likelihood of takeover or merger attempts being made at today’s low valuations. Glencore has already had one approach to Rio Tinto rebuffed, but it could be eyeing up a new attempt to become the world’s biggest miner. Other commentators suggest some sort of tie-up with BHP Billiton might be on the cards instead.
Blinkx
Video-advertising specialist Blinkx (LSE: BLNX) is looking a lot like a growth story gone wrong just now, having seen its share price crash by 88% since November last year. Wednesday’s close of 27.5p was its lowest in four years.
The problem stems from a profit warning that told us the once-profitable company is set to record a loss for the first half of this year, turning its previous pre-tax profit forecasts of £10m for the full year to vapour. Blinkx has the cash to keep going, but investors had thought its startup years were behind it and had been confident of profits.
