If youre frustrated by theperformance of your portfolio in 2016, spare a thought for investors in Sports Direct (LSE: SPD), Laird (LSE: LRD) and Countrywide (LSE: CWD) three of the worst performing shares in the FTSE 350 over the past year. Heres why theyve come unstuck.
Biggest losers
Accusationsof dubious working practices, public spats with politicians and numerous public relations gaffes have led shares in Sports Direct to surrenderover halftheir value inthe last 12 months.
Although the company is at pains to saythat its addressing its various problems, this is unlikely to soothe investors nerves after Decembersinterim results revealed a 57% plunge in half-year profits.News that the company is in the process of purchasing a 40m corporate jetisnt the best way of regaining trust.
Back in October, Lairds shares tanked after the company reported reduced demand from its biggest customer, Apple. This was particularly problematic for the 420m cap component supplier as ithad been hoping for a surge in demand fromthe latters new phone in September. When this didnt happen,Laird wasforced to estimate that full-year pre-tax profits would befar less than the 67m-80m analysts were expecting. The company was also dealt a blow when Samsung another customer experiencedproblems withits now infamous Galaxy Note 7.
Things havent been much better for 383m cap Countrywide, the UKs biggest lettings and estate agency company. Priced around 400p at the start of the year, its been downhill ever sinceJunes referendumvote triggered aslowdown in the property market. Last months decision by Philip Hammond to ban companies from charging fees to tenants only increased the pain.
Despite losingover 57% in value in 12 months, shares in Countrywide are likely to dip even lower in the short termas the company along with Laird isremoved fromthe FTSE 250andfund managers adjust their portfolios.
Contrarian bets?
If you can ignore the behaviour of its board (which, admittedly, is quite a big ask), Sports Direct is still a decent business. After all, this is a company that once managed to generate consistently high returns on capital and double-digit earnings growth.
That said, a forecast price-to-earnings ratio (P/E) of 16 thanks to a predicted 66% reduction in earnings per share makes this one to avoid for now. Theres not even a dividend to tide investors over.
On a forecast P/E of just 10 for 2017, shares in Laird might be a more enticing proposition. Although warningthat visibility on volumes remains poorfor its Performance Materials division, the companys wireless division continues to performwellwith Q3revenues up 58%. Given that this side of the business is involved in providing aerials and systems for the connected vehicle sector (a potentially huge growth market), things could dramatically improvefor Laird in the medium term. The 263mdebt on its balance sheet is still a concern though.
Shares in Countrywide now trade on a P/E of under 6, making it the cheapest of the threeto own. However, those attracted to value will needhuge amountsof patience and zeal (not to mention a risk-tolerant nature) with the manner of our departure from the EU still to be officially confirmed. With so many better opportunities in the market, Countrywide still warrants a wide berth.
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Paul Summers has no position in any shares mentioned. The Motley Fool UK has recommended Sports Direct International. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.