Fletcher Building dipped 0.1 per cent to $7.47. The stock dropped 6.2 per cent last Thursday, and another 1.5 per cent on Friday, after the company slashed full-year earnings guidance and flagged an impairment against Australian assets, with chief executive Mark Adamson gone immediately.
The company's operating earnings in the year ended June 30 were about $525m, down from $682m in 2016 and below the $610m-to-$650m range the company gave in March, itself a 15 per cent downgrade against earlier guidance because of problems with two major construction projects.
"It has stabilised, the thing supporting Fletcher is that on simple PE ratios it appears very cheap compared to Australian competitors, unsurprisingly it has quite a lot of Australian ownership," Goodson said. "It's a bit of a battle between good forces and bad news like the state of the housing cycle in New Zealand."
Outside the benchmark index, Warehouse gained 2.2 per cent to $2.28. The retailer is selling its financial services business to a subsidiary of SBS Bank for $18m, although most of that will be offset by an impairment.
The sale to SBS's Finance Now is expected to be completed within the next five weeks, Warehouse said, adding that the deal is expected to result in a non-cash impairment of software assets of approximately $16m in its full-year results for 2017.
In March, the company reported a 76 per cent drop in first-half profit to $13.6m after it took a $22.7m impairment charge against the financial services unit, recognised restructuring costs and earned less from its Red Shed department stores.
"It's been tough for them for quite some time, it certainly was far from meeting the original projections, Goodson said. "The diversification strategy which didn't work, it looks like the correct strategic direction from what the share price indicates, but it was clearly a very costly foray. It leaves the Warehouse, in common with many retailers in that discount department category, having done quite a bit of expansion prior to the GFC and sales haven't come through since, though that is more of an issue overseas."