3 FTSE Shares Crashing To New Lows

Published in Investing on 25 September 2012

Burberry (LSE: BRBY) and Mulberry (LSE: MUL) both suffer from fashion fallout.

The FTSE 100 (UKX) is hovering around the 5,850 point mark this week, in the absence of any real economic or market news, still a little short of its 52-week high of 5,989 points. But it's still way up on its 52-week low of 4,869 points, and hopefully it will never see such lows again.

But even if the market as a whole is actually looking pretty healthy, there are always individual shares that are struggling. Here are three testing new depths right now...

Phorm

Some may remember Phorm Corporation (LSE: PHRM) from a couple of years ago, when its targeted advertising technology caused a backlash from privacy champions who didn't want a third party scrutinising their browsing habits. Back then, the shares hit £30 before falling back to just £3, but I still thought you'd have to be mad to buy them.

Move forwards to today, and the shares are heading downwards again. After recovering from a year low of 65p in May, they recovered to 132p in August, but have since slid back to 80p again. The AIM-listed firm still seems to be some way away from profits, making an operational loss of around $30m a year.

Burberry

Troubled fashion retailer Burberry (LSE: BRBY) slid to a new low of 1,017p today, but has since picked up a few pence to 1,021p. The shares crashed by 20% on 11 September after the firm that is so popular with the pretty young things of China reported slowing growth.

Latest forecasts still suggest a year-end price-to-earnings (P/E) ratio of around 15, with a modest dividend of not much more than 2.5% expected. Now that would be a reasonable valuation for a strongly-growing company, but we just don't know how Burberry's next update will turn out -- it's due on 11 October, and many are expecting things to deteriorate further. Burberry could be a bargain soon, but perhaps not just yet.

Mulberry

Fashionable leather goods purveyor Mulberry Group (LSE: MUL) has also hit the skids of late, having plummeted from nearly £25 per share in May to a near-low of £12.50 now. The AIM-listed firm has actually done very well since its flotation in 2002, but after reaching this year's impressive high, a failure to exceed expectations in June led to the all-too-familiar story of the wheels coming off an over-hyped growth story.

There is still an impressive 20% earnings per share growth forecast for this year, with even better than that next year, so it's a well-performing company. It's just that the punters had pushed the shares up way too high -- even after the recent slump, they're still on a forward P/E of 24 for the full year.

If you want to avoid plummeting shares like these, the free Motley Fool report 8 Shares Held By Britain's Super Investor should help. It takes a look at some of ace investor Neil Woodford's major holdings, and he has consistently beaten the FTSE. Click here to get your free copy, while it's still available.

And if you're looking for riches from the oil and gas industry, try the new Motley Fool report, “How To Unearth Great Oil & Gas Shares”. It's free, so click here for your personal copy.

Further Motley Fool investment opportunities:

> Alan does not own any shares mentioned in this article.

Share & subscribe

Comments

The opinions expressed here are those of the individual writers and are not representative of The Motley Fool. If you spot any comments that are unsuitable hit the flag to alert our moderators.

 

There are no comments yet - why not be the first?

Join the conversation

Please take note - some tags have changed.

Line breaks are converted automatically.

You may use the following tags in your post: [b]bolded text[/b], [i]italicised text[/i]. All other tags will be removed from your post.

If you want to add a link, please ensure you type it as http://www.fool.co.uk as opposed to www.fool.co.uk.

Hello stranger

To add your own comment, please login.

Not yet registered? Register now.