What are we looking for?
Even with some modest gains recorded in Wednesday's trading, North American stock markets remain down about 5 per cent over the last month. To get a sense of what has driven portfolios lower in that period, we isolate the weakest performers on the Toronto Stock Exchange's benchmark index, after looking a the biggest winners on the index on Wednesday
What did we find?
Since hitting a year-to-date high on April 26, the S&P/TSX composite index has fallen just over 5 per cent. Fears that European financial problems will trip up the global recovery have driven the sell off, and not surprisingly industries that feed economic growth - energy and base metal mining - have suffered the sharpest drop in valuations. The biggest losers of the last month include oil, coal and drilling services companies, as well as producers of base metals such as copper and zinc.
Leading the descent is First Quantum Minerals Ltd., which has lost more than one-third of its value over the last month. The Vancouver-based company has taken a double blow, not only from the falling price of copper but also from a court decision in the Democratic Republic of the Congo that annulled the firm's mining rights at two mines. Quantum has about 25 per cent of its operations in the African country and the company says its plans to stay there despite the political and legal risks.
Lundin Mining Corp., which mines copper, zinc and lead, is a close second on the list. It has also lost more than one-third of its value during the past month, despite managing to swing to a first-quarter profit in April.
Western Coal Corp. was flying high just a few weeks ago, buoyed by its admission to the list of companies that make up the S&P/TSX composite index, and by investors' enthusiasm for its plan to increase coal production dramatically to take advantage of rising coal prices. Now the stock is down about 30 per cent.
The outlier on the list is Transat A.T. Inc., the Montreal-based airline and tour company, which is being hammered by weakening consumer sentiment. The firm has lost half its value since the beginning of the year and nearly a quarter in the last four weeks alone. Transat is not alone in its troubles. Rival Porter Aviation Holdings Inc. had to delay the pricing of its $120-million initial public offering last week because of investor apathy.
Thursday, we will scan the major winners and losers on the S&P 500, the broad based gauge for U.S. markets.