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News.com.au
a day ago
- Business
- News.com.au
Criterion: Back up the dumpster! It's time for an EOFY share purge
Potential tax loss selling candidates include ASX200 inclusions Domino's Pizza Enterprises and IDP Education Investors may want to offset capital gains from successful AI and Trump-related plays But beware: tax-loss selling is governed by ATO rules Tax-loss selling is a fine judgment call, because the dud shares can be on the cusp of a brilliant recovery. In some cases, their worth has been further devalued by EOFY selling that in theory will ease after June 30. But for investors sitting on capital gains from an AI driven splurge on data centres or a fear-driven plunge into gold, offsetting the gains by selling the lost causes makes sense. Or maybe hey want to lighten up on Commonwealth Bank (ASX:CBA) shares and offset the healthy gains Investors must ensure they are genuinely exiting the position, with the taxman's 'wash' rules preventing repurchasing within 45 days. Even then, investors must justify their action, such as independent research changing a call on a stock from 'sell' to 'buy'. Domino's prospects are as flat as its pizza Amid a string of downgrades, Domino's Pizza Enterprises (ASX:DMP) shares have lost 88% of their value since peaking in September 2021. Domino's problems include underperforming French and Japanese operations, while measures including store closures have failed to turn the company's fortunes. Long-time CEO Don Meij departed in November last year, while the Europe and Japan chiefs have also left the building. As with McDonald's decades previously, Dominos mastered the art of industrial scale, ultra fast production. Maybe the world has reached peak pizza … if that's possible. Busted flush Having seen 70% of the value of their holdings vanish over the past year, Star Entertainment Group (ASX:SGR) investors would have been better off at the blackjack table … and that's not saying much. The owner of gambling dens in Sydney, Brisbane and the Gold Coast, Star was crippled by money laundering and other governance controversies. Star is subject to a convertible note/debt-based rescue bid from US casino operator Bally's Corporation. An independent expert report dubs the proposal as 'not fair' to shaeholders but 'compelling' nonetheless, given the company's dire position. Investors should take the hint. Also pinged for money laundering transgressions, SkyCity Entertainment Group (ASX:SKC) last month warned of 'deteriorating' trading conditions at its Auckland and Adelaide casinos. Skycity shares have fallen 36% over the year. Morningstar dubs them as 'materially undervalued', but the company's luck doesn't look like turning any time soon. A sobering lesson Shares in overseas student wrangler IDP Education (ASX:IEL) plunged 50% after a June 3 profit warning, erasing $1 billion of value. IDP has nowhere to run, with its key geographies of Canada, Australia, the UK and the US all executing migration crackdowns. Overseas students made for a once thriving export industry, but the crackdown has cooked and plucked that golden goose. IDP remains the industry leader and management points to a recovery. The stock remains one class worth wagging, in our humble view. The stock has lost an astonishing 75% over the last year. Shooting Bambi Selling CSL (ASX:CSL) shares is like shooting Bambi, given the almost certain demand for its life-saving plasma derived products. Once the biggest ASX company, CSL has lost 17% of its value because of weakness in its Seqirus flu vaccine division and its acquired Vifor kidney health arm. Lingering concerns over Donald Trump's tariff and drug pricing have also weighed on sentiment. Broker Wilsons describes CSL as 'thorougly over owned'. But - hey - the experts said the same about CBA shares, which continue to defy gravity. Cochlear (ASX:COH) shares also are off the pace. In an earnings downgrade last week, the company noted weakness in developed markets for implant and sound processor sales. New implant and processor products might put things right, but so far investors aren't listening. Small cap cleanout candidates Call recording house Dubber Corp (ASX:DUB) in March 2024 discovered that $30 million of funds had gone missing. This week, the company said it would sue its external auditors over the unrecovered $26.6 million. But with investors sitting on an 80% loss since the incident, they probably should hang up. In the retail sector, shares in plus-sized clothier City Chic Collective (ASX:CCX) have shrunk 35% over the year and 97% over five years. The company recently warned of poor trading here and in the US, while tariffs are a worry. Weight Watchers filed for US bankruptcy in May and Ozempic sales are booming, so maybe there's a nexus. Owner of Kathmandu, KMD Brands (ASX:KMD) on Thursday signalled peak puffer jacket with a weak earnings outlook.
Herald Sun
06-06-2025
- Business
- Herald Sun
The lessons from IDP Education's week from Hell
The student recruiter has been hit by the migration backlash not just here, but in Canada, the UK and the US Other listed colleges are tweaking their business models to focus on domestic students While there's no end of the pain in sight, some brokers reckon IDP Education is a buy at its marked-down valuation It's not unusual for a small cap stock to decline 50% in value or more in one day. But when the top 200 stock IDP Education (ASX:IEL) achieved that this week – erasing more than $1 billion of market value – it was a case of 'class, take note'. The dramatic plunge came after the overseas student wrangler's confession on Tuesday that full-year revenue and earnings would plummet on the back of visa crackdowns. The stock has lost an astonishing 75% over the last year. Arguably the downgrade was years in the making, given the quality issues besetting both the tertiary and vocational sectors for some years. Still, investors were shocked by the scale of the revision or maybe they just hadn't done their homework. IDP guided to a 28-30% decline in student placement volumes, with its language testing arm likely to fall by 18-20%. Adjusted earnings before interest and tax (ebit) are expected at $115-125 million, a circa 50% year-on-year decline and well shy of market expectations of $166 million. Trump-like 'regulation by fiat' The visa crackdown was contained in a bill that the old Parliament did not pass, but government went ahead via a Trump-style Ministerial Directive (MD107). The measure means visa applications are processed on the perceived risk of the education provider and the student's country of origin. Dubbed by college operator Academies Australasia (ASX:AKG) as 'regulation by fiat', the measure compounds the problems of providers with high visa rejection rates. The reasons for the knock-backs are likely to be beyond the colleges' control. Nowhere to hide as migration policies bite IDP's problems don't start and end at home. Half-owned by sandstone universities, the company started out as a local uni recruiter but now touts for colleges in the UK, Canada and the US. Half of the company's revenue deriving from English language testing and teaching. The UK is even more zealous on reducing migration, as is Canada given the backdrop of the recent close election. We'll simply call US a no-go zone, given Trump's order to block Harvard University from admitting international students. Heeding the lessons IDP is not the only ASX-listed, overseas student focused education play feeling the pinch. It's a case of accepting the new reality and adapting. The amalgam of Icollege and Redhill Education, NextEd Group (ASX:NXD) reported a $2.2 million first half loss, amid a 21% revenue decline (to $47 million). However Nexted offset some of the impact of a 52% English language services decline with increased international vocation enrolment. The aforementioned Academies managed to grow half year revenue by 2.8% (to $23.9 million). The company also narrowed a previous $7.5 million loss to a $958,000 deficit. Operator of the Ikon (tertiary) and ALG (vocational) colleges, EDU Holdings (ASX:EDU) gets a gold star by doubling calendar 2024 revenue to $42 million. The company also managed a $2.6 million profit after three years of losses. Gary Burg told last month's AGM the impact of the visa changes remained unclear and the company was focusing on the domestic student market. A free kick of the 'political football'? Despite the IDP sell down there's still a country mile between its $1 billion market cap and the circa $20-40 million valuation ascribed to the other providers. As with all harsh sell-offs, have investors have over-reacted? Broker UBS contends IDP's business model is unbroken and the company 'remains a high-quality business in challenging conditions'. The firm rates the stock a 'buy' with a price target of $4.95, implying around 40% of upside. IDP is undertaking a detailed business review, with an update promised at its August full-year results. At Academies' AGM last year, acting chairman Chiang Meng Heng decried the sector being turned into a political Sherrin. 'Certain comments being bandied about smack of populism, rather than carefully considered positions that are good for the country,' he said. 'The air may not clear until after the federal election.' More than a month after the poll, clarity awaits. Originally published as Criterion: IDP Education's share plunge is a harsh lesson for the overseas student industry
News.com.au
06-06-2025
- Business
- News.com.au
Criterion: IDP Education's share plunge is a harsh lesson for the overseas student industry
The student recruiter has been hit by the migration backlash not just here, but in Canada, the UK and the US Other listed colleges are tweaking their business models to focus on domestic students While there's no end of the pain in sight, some brokers reckon IDP Education is a buy at its marked-down valuation It's not unusual for a small cap stock to decline 50% in value or more in one day. But when the top 200 stock IDP Education (ASX:IEL) achieved that this week – erasing more than $1 billion of market value – it was a case of 'class, take note'. The dramatic plunge came after the overseas student wrangler's confession on Tuesday that full-year revenue and earnings would plummet on the back of visa crackdowns. The stock has lost an astonishing 75% over the last year. Arguably the downgrade was years in the making, given the quality issues besetting both the tertiary and vocational sectors for some years. Still, investors were shocked by the scale of the revision or maybe they just hadn't done their homework. IDP guided to a 28-30% decline in student placement volumes, with its language testing arm likely to fall by 18-20%. Adjusted earnings before interest and tax (ebit) are expected at $115-125 million, a circa 50% year-on-year decline and well shy of market expectations of $166 million. Trump-like 'regulation by fiat' The visa crackdown was contained in a bill that the old Parliament did not pass, but government went ahead via a Trump-style Ministerial Directive (MD107). The measure means visa applications are processed on the perceived risk of the education provider and the student's country of origin. Dubbed by college operator Academies Australasia (ASX:AKG) as 'regulation by fiat', the measure compounds the problems of providers with high visa rejection rates. The reasons for the knock-backs are likely to be beyond the colleges' control. Nowhere to hide as migration policies bite IDP's problems don't start and end at home. Half-owned by sandstone universities, the company started out as a local uni recruiter but now touts for colleges in the UK, Canada and the US. Half of the company's revenue deriving from English language testing and teaching. The UK is even more zealous on reducing migration, as is Canada given the backdrop of the recent close election. We'll simply call US a no-go zone, given Trump's order to block Harvard University from admitting international students. Heeding the lessons IDP is not the only ASX-listed, overseas student focused education play feeling the pinch. It's a case of accepting the new reality and adapting. The amalgam of Icollege and Redhill Education, NextEd Group (ASX:NXD) reported a $2.2 million first half loss, amid a 21% revenue decline (to $47 million). However Nexted offset some of the impact of a 52% English language services decline with increased international vocation enrolment. The aforementioned Academies managed to grow half year revenue by 2.8% (to $23.9 million). The company also narrowed a previous $7.5 million loss to a $958,000 deficit. Operator of the Ikon (tertiary) and ALG (vocational) colleges, EDU Holdings (ASX:EDU) gets a gold star by doubling calendar 2024 revenue to $42 million. The company also managed a $2.6 million profit after three years of losses. Gary Burg told last month's AGM the impact of the visa changes remained unclear and the company was focusing on the domestic student market. A free kick of the 'political football'? Despite the IDP sell down there's still a country mile between its $1 billion market cap and the circa $20-40 million valuation ascribed to the other providers. As with all harsh sell-offs, have investors have over-reacted? Broker UBS contends IDP's business model is unbroken and the company 'remains a high-quality business in challenging conditions'. The firm rates the stock a 'buy' with a price target of $4.95, implying around 40% of upside. IDP is undertaking a detailed business review, with an update promised at its August full-year results. At Academies' AGM last year, acting chairman Chiang Meng Heng decried the sector being turned into a political Sherrin. 'Certain comments being bandied about smack of populism, rather than carefully considered positions that are good for the country,' he said. 'The air may not clear until after the federal election.' More than a month after the poll, clarity awaits.
Sky News AU
06-06-2025
- Business
- Sky News AU
ASX 200 zig-zags on Friday after US President Donald Trump lauds 'very good' phone call with Chinese President Xi Jinping
The ASX 200 has zig-zagged on Friday after US President Donald Trump said he held constructive talks with Xi Jinping on trade. Building materials company James Hardie rose 3.2 per cent in the first 40 minutes of trading as the embattled IDP Education added 2.4 per cent and insurance broker AUB Group jumped 2.1 per cent. The index sits up less than 0.1 per cent with the materials sector adding 0.6 per cent and utilities industry rising 0.4 per cent. The move follows a slump on Wall Street as investors look towards a monthly jobs report that will be critical for whether the US Federal Reserve will cut rates. It also comes after Trump posted on his social media platform Truth Social that he and Chinese President Xi Jinping had a 'very good phone call'. 'The call lasted approximately one and a half hours, and resulted in a very positive conclusion for both Countries,' Trump said. 'There should no longer be any questions respecting the complexity of Rare Earth products. 'Our respective teams will be meeting shortly at a location to be determined.' The Dow Jones fell 0.3 per cent on Thursday while the S&P 500 sank 0.5 per cent and the Nasdaq shed 0.8 per cent. The tech-heavy index's slump was in part driven by Tesla's 14 per cent after the feud between CEO Elon Musk and Trump exploded into public view. London's FTSE 250 Index dropped 0.2 per cent as Germany's DAX and the STOXX Europe 600 Index added 0.2 per cent on Thursday. New Zealand's NZX 50 Index is up about 0.2 per cent since trading began on Friday and Japan's Nikkei 225 has risen 0.4 per cent.
Sky News AU
04-06-2025
- Business
- Sky News AU
ASX 200 approaches all-time high point after Wall Street surges on the back of positive jobs numbers despite trade war
The ASX 200 has jumped 0.5 per cent on Wednesday after Wall Street surged on the back of strong jobs numbers that came at odds with concerns about Donald Trump's trade war. The jump puts the index about half a per cent from its February high point before the tariff announcements sparked massive sell offs amongst investors. It follows the ASX 200 finishing up about 0.7 per cent on Tuesday, despite IDP Education suffering a devastating 48 per cent share price drop after the company forecasted its earnings would halve. IDP has pared back some losses on Wednesday, with the stock up 4.6 per cent in the first 30 minutes of trading. The biggest movers so far include Judo Capital (up 6.5 per cent), Paladin Energy (up 6.1 per cent) and Boss Energy (up 5.3 per cent). Wall Street was in the green on Tuesday with the Dow Jones up 0.5 per cent, the S&P 500 rising 0.6 per cent and the Nasdaq jumping 0.8 per cent. Major chipmakers helped pushed the indexes up with Nvidia adding 2.8 per cent and Broadcom rising 3.3 per cent after the company said it had begun exporting its latest chip. The indexes were also boosted by US job openings unexpectedly rising in April to 7.4 million from 7.2 million despite Donald Trump's trade war, pushing the S&P 500 within three per cent of its all time high. London's FTSE 250 Index finished flat on Tuesday, while Germany's DAX Index jumped 0.7 per cent and the STOXX Europe 600 rose 0.1 per cent. New Zealand's NZX 50 Index has surged 0.6 per cent on Wednesday while Japan's Nikkei 225 has risen almost 0.9 per cent.
