30-June-2022: 5:30pm (6pm Sydney time). Well, we finished the year with more of a whimper than a bang. There was plenty of tax-loss selling and the so-called "window dressing" by fundies looked more like window-undressing (to steal a quote from Marcus Padley's EOD newsletter this afternoon). The closing single price auction (CSPA) was brutal:

This is how Marcus' newsletter (MarcusToday) summed up the day:

ASX 200 finished the year down in the dumps, down 132 points to 6568 (-2.0%). More undressing than window dressing. Late-sell off as funds took out the trash. Sloppy across the board. Banks were hit again as the rally from the lows has been skewered, the Big Bank Basket fell 2.6% to $159.30 with CBA down 2.8% and NAB off 2.4%. MQG off 2.1%, with the ASX down 1.6%, MFG down 5.1% as wealth managers under pressure with performance fees in doubt. AEF off 5.9% with PTM falling 2.3%. Insurers lost ground too, Healthcare escaping most of the fall, CSL down 0.3% and SHL up 0.6%. Industrials hit again, WES down 1.8% with COL and WOW also under pressure with EDV giving away recent gains down 1.4%. Tech was relatively calm, for tech. WTC down 0.5%, XRO off 2.0% and the All-Tech Index off only 0.9%. Resources though a sad and sorry place, BHP dropped 3.5%, FMG down 4.7% and RIO off 3.3%. Gold miners still under the kosh. NCM down 2.8% and NST falling 2.7%. Base metals eased but not significant. Energy stocks fell, WDS down 3.0% and STO fell 1.6% with coal stocks easing back too. In corporate news, CSR fell 1.5% after announcing a buyback, PAR rose 10.3% after acceptance by local partner, LTR gave back some gains falling 5.80% on a presentation. In economic news, job vacancies were up 13.8% and CBA raised mortgage rates on fixed-rate loans. Asian markets were mixed with China still pushing ahead on reopening hopes. 10-year yields steady at 3.65%. 

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There were some green shoots...

EGL (The Environmental Group) finished the day up +21.2% on the back of their contract win announcement that was covered well by @Noddy74 in his "#Contract awarded" straw this afternoon.

Swoop (SWP) was up +12% today on no news, but well down for the (financial) year. Swoop was covered by our very own @Wini and Claude Walker on "The Call" last Friday (June 24, 2022) - starting from the 9 minute mark. Yes, it's a roll-up Claude, but it's only just out of nappies. Very young. They all unwind at some point, but not just yet. Looking at their management's combined pedigrees, I wouldn't write this one off just yet. They've only just got started. And @Wini Swoop are into high-speed wireless internet for rural and regional areas and are now getting stuck into dark fibre in Australian capital cities by buying up small existing networks - which I bet is cheaper than building them out yourself as Vocus did when they started. Obviously Swoop aren't going to be targets for PE and super funds at this point, but that might be a different story in 3 to 5 years' time. And it didn't even take that long for the boys at Uniti to build that company up from what they started with a couple of years ago - to become the target of a takeover bidding war. You get into these roll-ups for a good time, not a long time, as Claude suggested - although he also made it clear they are not his cup of chai latte. And Swoop's good times got derailed soon after they listed (back-door listing via a reverse takeover of Stemify), and they've been falling hard since September. I waited for a decent pullback before buying in but still pulled the trigger way too early as it turns out. Their time will come. They haven't even gotten started, so they haven't unwound yet, that will come later, they need to wind up first. You mentioned that you were planning to have another look at Swoop @Wini - Have you done so yet, and if so - what did you think?

Another position I hold (and clearly bought too early once again) is Catapult International (CAT) and they rose +7.8% today after a very poor (financial) year. They released this pre-market-open this morning: Cat-New-real-time-data-analysis-features.PDF

And that's what they appeared to have rallied off the back of. They also released their FY22 Annual Report and AGM details, but that was all after 5pm, when the market had already closed.

Another one of my companies, GR Engineering Services (GNG) rose +3.2% today after rising +9.9% yesterday (Wednesday 29-June-2022). No news from them since their latest Guidance Upgrade on June 22nd (last week) - GNG-FY22-Guidance-Update-22June2022.PDF. I've written about them extensively here.

Another company I hold, Paradigm Biopharmaceuticals (PAR) rose +10.3% on the back of this announcement: Paradigm-Reports-Australian-Patent-Acceptance.PDF

But it was mostly red today. Interestingly, small and mid-caps outperformed large-caps:

Source: MarcusToday

The best moves in the top 100 were +1% or less, although there is one missing from that list: The Lottery Corporation (TLC) rose +2.3%, and they are in the ASX100.

However the Small Ords Index had a number of companies that rose by more than 10%, including PBH (+10.7%), SPL (+10.45%) and FCL (+10.04%), and there were other smaller companies that aren't even in that index (they're in the All Ords index or no index at all) that also rose by over 10%, like CAN (+19.57%), TIG (+11.76%) and MMI (+11.11%), plus the ones I've already mentioned: EGL (+21.2%), SWP (+12%) and PAR (+10.3%).

The thing about smaller companies is that they tend to have bigger moves in both directions so there are unfortunately too many companies to mention that have fallen by 10% or more in a single day in recent weeks, but I note that despite it being a down day for the market (ASX200 off -2%), I could only find 3 (three) ASX-listed companies that fell by more than 10% today: iSelect (ISU, -20.59%), Openpay Group (OPY, -17.24%) and Decmil Group (DCG, -13.04%), and those three appeared to fall purely due to tax-loss selling as they all have similar top left to bottom right share price graphs for the past 12 months and none have released anything market sensitive today to prompt a sell-off. Despite the obvious tax-loss selling, I wouldn't touch any of those three with a barge pole. They look fairly toxic to me. I've been a critic of Decmil for a number of years and the only thing that surprises me is that they are still trading. I expected that they would have gone broke already.

I guess there are people who like to ride things into the ground.

Source: Commsec

Those are all 5 year charts, but the one for OPY only shows their share price since listing on the ASX because they haven't been listed for the full five years. And I daresay they won't make it to 5 years either. Just because a company looks ridiculously cheap does NOT mean they won't get cheaper still. They can drop all the way to zero, and most companies with graphs like these eventually do, or else they get recapitalised and existing shareholders get diluted out of existence, which is much the same result from a shareholder's perspective.

Anyway, our job is to identify and avoid such companies and invest instead in those who have strong tailwinds, honest and capable management who think and act like shareholders (preferably because they are shareholders), when those companies have both a bright future and a clear path to get there. And when they are one of the best opportunities to make money over our desired timeframe out of the many opportunities we have to choose from. Sounds a lot easier than it actually is of course.

Onwards and upwards Strawpeople!