ASX weekly: Treasury Wine Estates sours investor taste buds

The Australian share market finished slightly lower last week, with the nation’s largest winemaker among the worst performers following serious allegations.
Treasury Wine Estates shares in the red
Source: TY Lim (Shutterstock)

The benchmark S&P/ASX 200 edged 0.38% lower at 6,311 points, while the broader All Ordinaries index was down 0.53% at 6,393 points.

Investors offloaded their shares in Treasury Wine Estates – a company which owns brands such as Penfolds and Wolf Blass – following a critical presentation from a US fund manager who claimed the winemaker had falsified sales figures.

The fund manager pointed out a number of issues confronting the company and said the stocks were overvalued by more than 50%.

It was revealed that Treasury’s Chief Executive Michael Clarke had sold almost half of his available shares a week before this presentation, pocketing $6.9 million as a result.

The consumer staples sector, which Treasury Wine Estates is a part of, was down 2.19% over the week.

ASX 200 Listed Companies – Top 5 Biggest Share Price Gains and Losses (03/05/2019 to 10/05/2019)
Biggest Gains Biggest Losses
Rank Company Closing Share Price % Change Rank Position Company Closing Share Price % Change
1 Saracen Mineral Holdings (SAR) $3.03 10.2% 1 1 Adelaide Brighton (ABC) $3.62 -18.3%
2 Northern Star Resources (NST) $8.97 9.7% 2 2 Graincorp (GNC) $7.55 -15.0%
3 Evolution Mining (EVN) $3.33 8.5% 3 3 Emeco Holdings (EHL) $1.83 -11.8%
4 Bingo Industries (BIN) $1.91 7.6% 4 4 Treasury Wine Estates (TWE) $15.08 -11.7%
5 Domain Holdings Australia (DHG) $3.04 7.0% 5 5 Hub24 (HUB) $13.70 -11.1%
Prepared by Canstar. Prices taken as of market close Friday 3rd May and Friday 10th May.

Material sector stocks – including Saracen Mineral Holdings, Northern Star Resources and Evolution Mining – finished in the green last week, taking out the top spots for share price gains.

Iron ore company Fortescue Metals added more than $6 million to its market value.

Cement manufacturer Adelaide Brighton saw the biggest share price fall last week, down 18.3%, following the release of a disappointing market update.

The company blamed its poor performance on a number of factors, including less demand for construction materials, increased competition and higher costs.

At an annual meeting on Friday, shareholders cast a protest vote against Adelaide Brighton’s earnings report, sparked by the company electing to pay out millions of dollars to former CEO Martin Brydon.

ASX 200 Listed Companies – Top 5 Biggest Market Cap Gains and Losses (03/05/2019 to 10/05/2019)
Biggest Gains Biggest Losses
Rank Company $ Change in Market Cap Closing Share Price % Change in Share Price Rank Company $ Change in Market Cap Closing Share Price % Change in Share Price
1 DEXUS Property Group (DXS) $1,153,776,643 $12.64 1.7% 1 Cimic Group (CIM) -$1,517,509,174 $45.27 -9.4%
2 Woodside Petroleum (WPL) $767,644,270 $35.73 2.3% 2 Treasury Wine Estates (TWE) -$1,438,200,970 $15.08 -11.7%
3 National Australia Bank (NAB) $759,055,110 $25.97 1.1% 3 Macquarie Group (MQG) -$1,415,992,190 $124.55 -3.2%
4 Commonwealth Bank of Australia (CBA) $690,393,408 $75.40 0.5% 4 CSL (CSL) -$1,214,310,747 $197.25 -1.3%
5 Fortescue Metals Group (FMG) $677,372,282 $7.54 3.0% 5 Qantas Airways (QAN) -$654,741,677 $5.41 -6.4%
Prepared by Canstar. Prices taken as of market close Friday 3rd May and Friday 10th May.

Two of Australia’s major banks – National Australia Bank and Commonwealth Bank – added more than $7 million and $6 million to their market values, respectively.

Macquarie Group’s shares fell 3.2% and it lost more than $1.4 billion in market value.

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