The online retailer warned in a recent trading update that it would have to cut profit targets due to declining operations in international markets, together with an appreciation in sterling.
The stock slumped more than 40 per cent in today’s trading session after the profit warning, which follows a loss of more than 26.07 per cent already in 2014.
At the beginning of April, ASOS issued another warning that profits would be lower than expected. The half-year results, released on 2 April 2013, reported pre-tax profits were down more than 20 per cent, to £20.1m.
The funds and investments trusts include two Baillie Gifford funds and FE Alpha Manager Harry Nimmo's Standard Life UK Smaller Companies fund and investment trust.
The Standard Life UK Smaller Companies fund has suffered in 2014, partly as a result of its ASOS holding. It has lost 5.73 per cent compared with an average gain in its IMA UK Smaller Companies sector of 1.29 per cent.
Performance of trust, sector and benchmark in 2014
Source: FE Analytics
The Standard Life UK Smaller Companies trust is also down since the start of the year. Our data shows it has shed 8.58 per cent compared with an average fall in the IT UK Smaller Companies sector of 1.46 per cent.
Nimmo currently has 2.4 per cent of his fund in ASOS, though this has come down from 4.9 per cent in April of this year.
The £142.8m Baillie Gifford Global Discovery fund, run by FE Alpha Manager Douglas Brodie, and the £126m Baillie Gifford UK Equity Alpha fund, managed by Gerard Callahan, have 1.8 per cent and 4.2 per cent of their portfolios in ASOS, respectively.
The two funds are down by 4.41 per cent and 5.25 per cent respectively since the beginning of the year.
Performance of funds in 2014
Source: FE Analytics
The other funds that hold ASOS in their top-10 include Giles Hargreave’s Marlborough UK Multi Cap Growth fund, as well as Alliance Trust Sustainable Future Absolute Growth, EFA New Horizon Income and Growth, J Chahine Digital Funds Stars Europe, NFU Mutual Global Growth and the SVM UK Emerging trust.
Early indications show managers are not treating the correction in the stock as a buying opportunity.
FE Alpha Manager James Thomson, who heads up Rathbones Global Opportunities, says it is too early to comment fully on how he is going to trade the stock.
However, the manager sold about a third of his holding after the last sharp fall in the company’s stock price at the beginning of April, taking it out of his top-10 holdings.
Nimmo has also trimmed his ASOS holding since the last correction in April 2014. The fall from 4.9 per cent to 2.4 per cent is partly down to the poor performance of the stock, though this reduction also suggests he has taken money off the table.
The manager bought the stock over 10 years ago and has championed it ever since. However, he has been less willing to talk about his outlook for it in recent weeks.
ASOS has been one of the best performing stocks in the aftermath of the financial crisis. Over the past five years it has returned 1,091 per cent, compared with a rise in the FTSE All Share of 92.62 per cent.
This rise does not include today’s steep losses, however.
Performance of stock and index over 5yrs
Source: FE Analytics
ASOS has cut its full-year operating profit margin guidance from 6.5 per cent to 4.5 per cent; however steeper losses at ASOS’s Chinese start-up and slowing growth in the UK could be concerning investors further.
The company is not the only online retailer to see its share price suffer of late. Ocado, Boohoo and AO World are all down in the last three months.
Despite the recent sell-offs, ASOS is still up 19,165.87 per cent since it listed in October 2001 – again, not including today’s losses.
