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FIVE at FIVE AU: ASX in the red as Metcash and Audinate take a dive

Published 22/10/2024, 04:04 pm
© Reuters FIVE at FIVE AU: ASX in the red as Metcash and Audinate take a dive
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It’s a sea of red on the ASX today.

The S&P/ASX200 dropped 132.40 points or 1.59% to 8,212.00, crossing below its 20-day moving average. The index has lost 1.28% for the last five days, but sits 2.06% below its 52-week high.

The bottom-performing stocks in this index are Polynovo Ltd, Metcash Limited (ASX:MTS) on the back of a Goldman Sachs (NYSE:GS) analyst downgrade and Audinate Group Ltd (ASX:AD8), down 6.93%, 5.92% and 6.71% respectively.

Only one sector made it into the green: Information Technology gained just 0.07%. The worst-performed sectors were Real Estate, Healthcare and Consumer Discretionary down 2.30%, 2.30% and 1.94% respectively.

Looking at the small cap sector, the S&P/ASX Small Ordinaries lost 1.07% today to finish at 3,190.20. Over the past five days, it has lost 0.74%.

Among the small caps, Polymetals Ltd hit a new record high today, rising as much as 10.23% to $0.485 while Yandal Resources Ltd (ASX:YRL) followed yesterday's 120% gain to again hit a two-year-high, increasing another 20.94% to $0.26 intra-day.

Other gains were Orthocell Ltd (ASX:OCC, OTC:ORHHF), which was up to 10.38% higher to $0.745, Nova Minerals Ltd (ASX:NVA, NASDAQ:NVA) as much as 7.9% higher to $0.205, Magnetite Mines Ltd (ASX:MGT) up 5.88% to $0.18 and Titan Minerals Ltd (ASX:TTM, OTC:TTTNF) up to 5.46% higher to $0.58.

Audinate navigates major challenges

Audinate has faced several challenges this quarter including shorter order lead times, increased inventory across the industry, slower clearance of raw material inventories by our manufacturing customers and softer than expected demand from end-users.

According to the company, these headwinds are expected to continue into Q2 FY25, leading to a Q2 gross profit run rate in line with Q1 FY25.

The company stated: “Previously, Audinate expected to generate a slightly lower FY25 US$ gross profit compared to FY24. However, due to the performance in the first half of the year, it is now unlikely we will achieve that result.

"Management will update the market on performance and outlook after completion of trading in Q2 FY25, anticipating a moderately stronger second half.

“As previously communicated, FY25 is a transitional year as our manufacturing customers work through their inventory, and we wait for a recovery in end-user demand to drive future orders. We expect this transition to last only a year, returning to growth in FY26 and more normal customer order patterns.”

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