The Freedom Foods Group Ltd (ASX: FNP) share price is plummeting today in response to news of a management shake-up.

At the time of writing, Freedom Foods shares have dropped 14.06% to $3.025 after falling as much as 21.88% in morning trade.

What did Freedom Foods announce? 

This morning, the company revealed that its managing director and chief executive, Rory Macleod, is “on leave pending a further announcement that is expected to be made early next week”.

Commercial director Brendan Radford will take the reins for the time being as acting CEO. Mr Radford was previously the Australasian managing director of Rockstar Energy Drink and has 18 years of international experience in the fast-moving consumer goods (FMCG) space.

Additionally, current non-executive chairman Perry Gunner will move into an executive position on the board, in place of Mr Macleod.

Freedom Foods didn’t shed any further light on the matter, leaving many investors scratching their heads.

Mr Macleod joined Freedom Foods in 2003. Over the years, he has been involved in the company’s strategic, operational and financial development and stepped into the top job in 2012.

Today’s news follows another leadership announcement that was released after the market closed yesterday.

In yesterday’s after hours release, Freedom Foods disclosed the resignation of chief financial officer and company secretary, Campbell Nicholas.

Mr Nicholas joined Freedom Foods in September 2016. No details were provided in relation to his exit.

Stephanie Graham, general manager corporate development, has been appointed as acting CFO. Meanwhile, current non-executive director Trevor Allen has been appointed company secretary.

“The Finance team will continue to manage the usual financial controls,” Freedom Foods stated.

Including today’s drop, Freedom Foods shares have fallen just over 40% year-to-date.

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Motley Fool contributor Cathryn Goh 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.

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The CSR Limited (ASX: CSR) share price has fallen 1.57% on the back of its annual general meeting (AGM) held today. CSR is a leading building products company in Australia and New Zealand which has been in operation for 165 years. 

The AGM follows the release of the company’s full year results for year ended 31 March 2020 (YEM20) in which it delivered a statutory net profit of $125 million.

The CSR share price has fallen 7.4% over the past 12 months. This is in contrast to the S&P/ASX200 Index (ASX: XJO) which has declined 10.3%.

Let’s discuss the trading results, financial position and outlook released in the AGM announcement today.

Trading results

Managing director Julie Coates gave an update on the trading results in her address at the AGM:

”For the first 11 weeks of the current financial year (on a like for like basis), building products revenue in Australia is down 3%. Including the impact of New Zealand COVID-19 restrictions, the decline is 5%.”

The trading results were in line with CSR’s expectations of a slowdown in activity. As a result of the continuing uncertainty surrounding coronavirus, no guidance was provided by the company for YEM21.

Financial position

CSR’s financial position remains strong with a net cash position of $95 million at 31 March 2020. An additional $200 million facility is available should the need arise.

The company has decided to pause dividends and its share buyback, again due to uncertain economic outlook. Before the pause, CSR had returned $69 million in dividends in YEM20 and more than $69 million in an on-market share buyback which commenced in March 2019.

Outlook

Julie Coates gave some guidance regarding the outlook for the construction industry.

”Current lead indicators such as new homes sales in Australia during April and May are down 19% compared to the same period last year. This provides some indication of lower activity expected later in the year due to the lag in demand for our products, noting there will also be benefit from the announced government stimulus measures, but the timing and extent remains uncertain.”

The government stimulus Julie is referring to is the federal government’s $25,000 HomeBuilder grant. This provides eligible owner-occupiers with cash to substantially renovate an existing home.  

Is the CSR share price a buy?

In my view, an investment in CSR Limited looks to be risky in light of the downturn in new home sales. Furthermore, it’s too early to tell if the government stimulus will have its desired impact on the construction industry. From my perspective, this assistance also serves to reinforce the severity of the downturn facing the sector. 

Having said that, weakness in this cyclical industry could be a great entry point for the contrarian investor as the industry recovers. 

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Motley Fool contributor Matthew Donald has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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Let the good times roll!

The S&P/ASX 200 Index (INDEXASX: XJO) has been a great place to have your money over the past 3 months. Since 23 March, the ASX 200 has appreciated more than 30%. But as the weeks of this bull market stretch into months, I think investors should use an ever-growing sense of caution to avoid making ASX mistakes. 

Last week I wrote about how signs of dangerous investor behaviours are growing. Today, I’m suggesting 3 simple things to avoid in this bull market.

ASX mistake 1: Don’t try and make a quick buck

There have been a lot of signs that some investors are trying to make a quick buck in this bull market. Whether its buying distressed companies like Webjet Limited (ASX: WEB) or taking punts on the price of oil through the BetaShares Crude Oil Index ETF (ASX: OOO),  these kinds of movements are nothing more than gambling in my view. If you know this is what you’re doing, then go for it. It’s a free country. Just recognise that these kinds of trades can backfire very easily and even lose you 100% of your capital. If you want to actually invest rather than speculate, stick to buying businesses that you think will return your cash and more over the long-term.

2: Stay away from options trading

Options are financial derivative products that use leverage to ‘make a bet’ on which way a share price will go. They have been increasingly popular in recent months, particularly over in the United States. If you’re an experienced investor that knows what they’re doing, options can be a great way to make a small speculative investment or hedge your positions. But for most investors, I think staying away from options is a good idea. They are highly risky investments that rely on the whims of the share market. As such, I think the risk-reward ratio for most investors is skewed against them. As such, I would caution the use of options for most people out there.

3: Don’t chase hype trains

In my view, investing is about finding quality businesses that you can feel comfortable investing in over many years, hopefully at a great price. Jumping into growth shares like Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) or Splitit Ltd (ASX: SPT) just because they have been going up isn’t a great long-term strategy in my view. It concerns, not excites me when I see something like Splitit go up more than 100% in a few days.

I think this attitude is far more conducive to good long-term returns than risking a major ASX mistake by jumping on something that looks to be shooting the moon, just so you can catch some of the potential stars.

More reading

• The CBA share price is down 13% this year. Is it a cheap buy?
• Why the CSR share price is falling today
• Top brokers name 3 ASX 200 shares to buy today
• How to get rich by investing in ASX shares
• ASX 200 down 0.2%: Afterpay hits record high, TPG Telecom merger vote

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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.

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