Last year was an extraordinary year. There were some big performances in the ASX 200 (ASX: XJO), but there were also some bad ones. This article is about the three worst performers, and how it happened.
COVID-19 completely smashed some industries, and they remain challenged:
Unibail-Rodamco-Westfield (ASX: URW)
The Unibail-Rodamco-Westfield share price fell by around 54% over the past year.
This business is one of the largest shopping centre real estate investment trusts (REITs) in the world. As the name might suggest, this is the business that bought the international Westfield shopping centres (but not the Australian and New Zealand ones, which are still owned by Scentre Group (ASX: SCG)).
COVID-19 has been particularly economically painful for physical shopping, to the benefit of e-commerce. As a huge landlord, URW is one the ones that are still suffering from changing consumer habits, rental deferments (at best) and a smaller level of foot traffic.
However, URW shares are getting closer to doubling since early November when the vaccine effectiveness news was announced.
Flight Centre Travel Group Ltd (ASX: FLT)
The Flight Centre share price has fallen by approximately 60% over the last year.
Global travel almost came to a standstill during April as borders shut and governments put in restrictions. As a business that specialises in helping people travel, travel agent business Flight Centre was obviously going to be heavily hit. Things are still nowhere near back to normal for the ASX 200 share. There’s still almost no travel internationally for Aussie passengers, but the domestic market is opening up a bit. Or it was, before the NSW outbreak in December.
Like URW, the Flight Centre share price has gone up a lot since early November thanks to positive vaccine news.
AVITA Medical Inc (ASX: AVH)
The Avita share price has dropped around 62% over the past year.
Avita is a clinical and commercial company developing and marketing a range of respiratory and regenerative products. The first regenerative medicine product brought to the market by Avita Medical was ReCell spray-on skin for the treatment of burns.
The Avita share price ran hot in 2019 up to February 2020. However, it was (and still is) generating a relatively small amount of revenue compared to its market capitalisation even after such a large decline over 2020. In the first quarter of FY21 it made US$5.1 million of revenue, which was growth of 56% over the prior corresponding period.
Avita is likely to ‘grow into its valuation’ if it keeps growing at that kind of pace, particularly with a gross margin of 82%, but during 2020 the share price may have gotten a bit too hot.
I’m not sure if any of these three bad performers in 2020 can turn things around quickly in 2021, though Avita could keep growing revenue nicely. I think ASX growth shares that are making good profit, like Pushpay Holdings Ltd (ASX: PPH), could continue to be ones to keep an eye on.
