The worst-returning ASX 200 stocks of FY24 (across each sector)

Following on from our top-returning ASX 200 stocks by sector wire, we now turn to the other side of the coin – those that plumbed the depths of the performance tables in FY24. 

One thing I noted in pulling together this list was the distinct lack of news about them. Trawling the recent backlog of fundie commentary on Livewire, it was, in some cases, difficult to find much. That in itself seems instructive – perhaps this is where some of the most enticing opportunities can be found for those brave/lucky/smart enough to find and take a punt on those companies primed for a turnaround.

Kicking off with the top-returning sector of the year, we start with an Information Technology firm that has fallen on more difficult times.

Technology

Iress (ASX: IRE)

• 1-year return: -20.9%
• Market cap: $1.5 billion

1851 Capital’s Chris Stott looks through the more recent troubles the software firm has encountered, firmly backing CEO Marcus Price who took over in February. Price has embarked on a program of cost-cutting, Stott also suggesting the firm is a potential takeover target for private equity.

What the brokers think

Macquarie rated Iress as NEUTRAL on 22 February

Morgans rated the company as HOLD on the same date.

Learn more about this company on Market Index.

Financials

Insignia Financial (ASX: IFL)

• 1-year return: -21.4%
• Market cap: $1.5 billion

A wealth management firm formerly known as IOOF, I had to go back to last November to find a discussion of Insignia in the pages of Livewire. But it was an encouraging mention, where Merlon Capital Portolio Manager Andrew Fraser suggested the market was overly-pessimistic.

What the brokers think

In early May, Ord Minett added Insignia to its coverage with a HOLD rating and a $2.50 price target.

Learn more about this company on Market Index.

Consumer Discretionary

Star Entertainment Group (ASX: SGR)

• 1-year return: -55.5%
• Market cap: $1.39 billion

The embattled casino operator has been in the news for all the wrong reasons in recent years, amid regulatory missteps and licensing suspensions in some jurisdictions. Star topped one list – of sorts – in being named by Citi in May among its most unattractive stocks, as written about here by Livewire's Hans Lee.

Learn more about this company on Market Index.

Real Estate

Lendlease Group (ASX: LLC)

• 1-year return: -28.5%
• Market cap: $3.9 billion
• Market Index Broker Consensus: BUY (1 Buy, 2 Hold, 0 Sell)

The latest big news out of the property and infrastructure company was management’s May announcement of a turnaround on its strategic focus. After many years of focusing on a combination of projects both domestic and offshore, the company pledged to simplify operations in the local market.

Lendlease is one of several companies discussed by Atlas Fund Management’s Hugh Dive in his latest “Dogs of the ASX” research.

Equities

Dogs of the ASX for the 2024 Financial Year

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“Lendlease has continued to underperform due to its high-profile but unprofitable international construction operations, though in May the company announced the staged sale of the international business and a $500 million buyback,” writes Dive.

Learn more about this company on Market Index.

Healthcare

Sonic Healthcare (ASX: SHL)

• 1-year return: -28.9%
• Market cap: $12.2 billion
• Market Index Broker Consensus: BUY (5 Buy, 3 Hold, 0 Sell)

A Sydney-based, Australian company, Sonic provides laboratory, pathology, and radiology services. The company made Hugh Dive's "Dogs of the ASX" list thanks to its "self-inflicted wounds". But it is also tipped as a likely turnaround for the year ahead. 

Sonic was also recently named by Schroders' Martin Conlon in the AFR, where he lauded Sonic's extensive data and multiple market coverage. 

What the brokers think

JPMorgan rated Sonic NEUTRAL as of 21 March.

Citi also rated the company NEUTRAL as of 21 February.

Learn more about this company on Market Index.

Consumer Staples

Endeavour Group (ASX: EDV)

• 1-year return: -20.09%
• Market cap: $8.9 billion
• Market Index Broker Consensus: STRONG BUY (6 Buy, 2 Hold, 0 Sell)

The liquor retailer and hotel operator, and company behind well-known brands Dan Murphy’s and BWS, also appears in Hugh Dive’s “Dogs of the ASX” research.

“Endeavour has continued to underperform due to tighter regulations around its gaming machines, which are a high-margin segment of the hotel business,” Dive says. He also suggests such regulations aren’t likely to be wound back any time soon.

What the brokers think

Morgan Stanley rates Endeavour as OVERWEIGHT as of 15 April

Citi rates the company as NEUTRAL as of 8 April

Learn more about this company on Market Index.

Materials

Liontown Resources (ASX: LTR)

• 1-year return: -68.45%
• Market cap: $2.2 billion
• Market Index Broker Consensus: BUY (2 Buy, 2 Hold, 0 Sell)

Earlier this week, news emerged of a major offtake and funding agreement, which would kickstart its flagship Kathleen Valley mine in Perth. The last time Liontown made headlines was back in October, when Albemarle abandoned its acquisition bid at the 11th hour after spoil tactics were employed by Gina Rinehart.

What the brokers think

Goldman Sachs rates the company NEUTRAL with a price target of $1.15

Learn more about this company on Market Index.

Industrials

Fletcher Building (ASX: FBU)

• 1-year return: -43.8%
• Market cap: $2 billion
• Market Index Broker Consensus: SELL (0 Buy, 2 Hold, 1 Sell)

The building materials company, which focuses in the Australian and New Zealand markets, has been hit by the cyclical slowdown in residential construction.

It was mentioned by Schroders' Martin Conlon in March, who remains a "strong believer in the potential for far greater value."

What the brokers think

Morgan Stanley, "noted the continued deterioration in volumes in the Australian and New Zealand building sectors “provided clear evidence” of a negative impact on FBU’s earnings. MS was one of several brokers that applied a sharp cut to their price target for the stock," wrote Livewire's Carl Capolingua in May.

Learn more about this company on Market Index.

Energy

Woodside Energy Group (ASX: WDS)

• 1-year return: -17.1%
• Market cap: $54.5 billion
• Market Index Broker Consensus: HOLD (3 Buy, 3 Hold, 1 Sell)

The oil and gas mega-cap’s share price slide over the past 12 months followed the decline in crude prices. But as far as income stocks go, Lazard’s Dr Philipp Hofflin thinks this is an opportunity hard to ignore.

"Woodside trades on a 15% cashflow yield. Now, we have much more conservative prices. We’re value investors. We like to have a margin of safety. But even on that it's a 10% cashflow yield. That's a very good starting point,” he said in a recent interview with Livewire’s Chris Conway.

What the brokers think

Macquarie rates Woodside as OUTPERFORM with a $32 price target.

Morgan Stanley rated the company OVERWEIGHT with a $34 price target as of 27 February.

Learn more about this company on Market Index.

Utilities

Genesis Energy (ASX: GNE)

• 1-year return: -20.6%
• Market cap: $2.1 billion

A diversified energy company and one of New Zealand's largest in the space, Genesis sells electricity, reticulated natural gas and LPG through its retail brands of Genesis and Frank.

News and views about this company are quite thin on the ground. It rated a mention in the context of NZ Government activity around EV charging infrastructure, as noted in this piece from 12 months ago by Eley Griffiths' Nick Guidera.

Learn more about this company on Market Index.

Telecommunications

Nine Entertainment (ASX: NEC)

• 1-year return: -30.4%
• Market cap: $2.2 billion

A big round of job cuts is the latest news from the broadcaster and publishing company. Nine was also on the receiving end of some negative press surrounding its then chairman, Peter Costello, a few weeks ago - he later resigned amid the furore. 

Perhaps unsurprisingly, in mid-June, Nine was rated a unanimous "Sell" by Plato's Peter Gardner and Merlon Capital's Andrew Fraser in a Buy Hold Sell episode.

"Notwithstanding that underperformance, I agree with Pete. The outlook is challenging both in a more cyclical sense in the short term, but longer term structural issues around free-to-air TV and publishing," Fraser said.

Learn more about this company on Market Index.