In late morning trade the S&P/ASX 200 Index (ASX: XJO) looks set to end a very positive week on a disappointing note. At the time of writing the benchmark index is down just over 1.2% to 5,778.8 points.

Four shares that have fallen more than most today are listed below. Here’s why they are tumbling lower:

The Costa Group Holdings Ltd (ASX: CGC) share price is down 4% to $3.16. This follows the release of the horticulture company’s annual general meeting update this morning. That update revealed that Costa’s long-serving CEO intends to retire within the next nine months. In addition to this, the company revealed that the majority of its produce is in demand and receiving favourable prices. However, it did warn on increasing operating costs relating to the pandemic.

The Freedom Foods Group Ltd (ASX: FNP) share price has crashed 13% lower to $3.80. Investors have been selling the diversified food company’s shares after the release of trading update. According to the release, a number of Freedom Foods’ channels have been materially impacted by the pandemic. And given the importance of the second half for its overall result, this looks likely to lead to a significantly weaker than expected full year result in FY 2020.

The Sonic Healthcare Limited (ASX: SHL) share price is down 3% to $28.34. This decline may be in relation to a broker note out of UBS this week. According to the note, the broker has a sell rating and $25.10 price target on the company’s shares. It appears concerned that Sonic may not benefit as greatly from pandemic testing as the market expects.

The Westpac Banking Corp (ASX: WBC) share price has fallen over 4% to $17.60. This sizeable decline appears to be the result of profit taking after some sensational gains this week. Prior to today, the Westpac share price was up over 22% week to date. The rest of the big four are tumbling lower with Westpac today, which is weighing heavily on the performance of the ASX 200.

More reading

• Why the Freedom Foods share price crashed 19% lower today
• Why the Costa share price is sinking lower today
• 5 things to watch on the ASX 200 on Friday
• ASX 200 rises again, ASX banks push higher
• Are ASX bank shares finally back in the buy zone?

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia has recommended Freedom Foods Group Limited and Sonic Healthcare Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why Costa, Freedom Foods, Sonic, & Westpac shares are tumbling lower appeared first on Motley Fool Australia.

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The Wesfarmers Ltd  (ASX: WES) share price has been up and down in 2020. Shares in the Aussie conglomerate are down 2.46% this year whilst still outperforming the S&P/ASX 200 Index (ASX: XJO) but this doesn’t tell the whole story.

The group’s shares hit a new 52-week high of $47.42 per share in mid-February. That was just prior to the bear market which sent the Wesfarmers share price tumbling to a 52-week low of $29.75 on 23 March.

So, despite the volatility, is the Wesfarmers share price set to climb in 2020?

Is the Wesfarmers share price headed higher this year?

I think Wesfarmers is actually in a strong position right now. The Aussie conglomerate is sitting on a pile of cash after having sold another part of its stake in Coles Group Ltd  (ASX: COL) for $1.1 billion at the end of March.

Wesfarmers is diversified across a number of sectors which is good for stability. However, one of those happens to be the Aussie retail sector which is struggling right now.

Even before the coronavirus pandemic, retailers were doing it tough. Late this month Wesfarmers made the call to restructure its Kmart Group arm. This includes the closure of up to 75 Target stores across Australia as well as the rebranding of further Target stores to Kmart.

It’s true that cash is king right now. Ordinarily, having excess cash could be bad for the Wesfarmers share price. This is because the cash is not being put towards earning a strong return. However, the current economic environment is quite uncertain.

This means that strong cash positions have a couple of advantages. One is balance sheet strength and the ability to operate confidently. The other is being primed to acquire more companies and expand operations in 2020.

Many companies are trading cheaply now because of lost earnings and lower growth forecasts. This means Wesfarmers could swoop in and buy undervalued shares to diversify and broaden its portfolio.

Foolish takeaway

I think the Wesfarmers share price could climb higher in 2020. The Aussie conglomerate is looking to restructure and improve its efficiency right now.

Combined with a strong cash position and undervalued companies in the market, Wesfarmers definitely has the potential to climb in value over the next 7 months.

More reading

• 2 ASX 200 tech shares I’d like to buy today
• Why I think the CSL share price is a strong buy today
• 5 things to watch on the ASX 200 on Friday
• ASX 200 rises again, ASX banks push higher
• Are ASX bank shares finally back in the buy zone?

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Will the Wesfarmers share price climb higher in 2020? appeared first on Motley Fool Australia.

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The Freedom Foods Group Ltd (ASX: FNP) share price is on course to end the week on a very disappointing note.

At the time of writing the diversified food company’s shares are down 15% to $3.68.

At one stage today they dropped 19% to a multi-year low of $3.53.

Why is the Freedom Foods share price crashing lower?

Investors have been selling Freedom Foods’ shares following the release of a trading update this morning.

That update revealed various impacts from the pandemic, both positive and negative, across its business.

During March and April, the company’s Australian retail grocery channel experienced stronger than expected demand. This was driven by consumer spending shifting to this channel during lockdown. Sales in the channel have now normalised.

Also performing positively was its dairy nutritionals business. Demand for lactoferrin remains strong and its performance is in line with expectations. Pleasingly, 80% of FY 2021 output is already contracted.

Things were not so positive for the out of home channel in Australia. Sales in this high margin channel were just 25% of its pre-pandemic expectations in April. This was due to distributors destocking because of reduced demand from widespread outlet closures and restricted trading. The channel is recovering slowly and in May its sales have recovered to 50% of pre-pandemic expectations.

It has been a similar story in the industrial channel. This channel produces cream products which are used in food service and hospitality industries. Sales in April were approximately 55% of pre-pandemic expectations and are forecast to be 45% in May.

Finally, its export channel has underperformed during the pandemic. Sales to China are down 35% compared to expectations. However, management notes that the channel has started to recover now.

What does this add up to?

The sum of the above is a much weaker second half result. And given the importance of its second half to its overall result, its full year result looks set to fall well short of expectations.

Management explained: “Typically, the second half of the financial year is a significant sales and margin contributor to the overall result: normally the second half contributes over 60% of full year operating EBDITA. For FY2020, the combination of the level of sales, changed sales mix from March to June, the impact of doubtful debts and an unrecovered higher seasonal milk pricing will materially impact the second half operating EBDITA relative to pre COVID 19 plans.”

More reading

• Why Costa, Freedom Foods, Sonic, & Westpac shares are tumbling lower
• Why Fortescue, Freedom Foods, Pushpay, & QBE shares are dropping lower
• Where to invest $10,000 into ASX shares immediately
• Where I would invest $5,000 into ASX shares immediately
• 3 top ASX shares to buy now and hold for 10 years

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Freedom Foods Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the Freedom Foods share price crashed 19% lower today appeared first on Motley Fool Australia.

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