Are these shares the biggest bargains on the S&P/ASX 200?

The last few months may have been kind to shareholders of Fortescue Metals Group Limited (ASX: FMG) who have watched on as their shares rocket higher and higher.

But unfortunately not all shares have fared so well. Some have been beaten down to such a degree that I can’t help but think they could be the biggest bargains on the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) right now. The three shares are as follows:


In the last month BWX’s share price has dropped by just under 20%, possibly as a result of profit taking. I believe this has left the personal care company’s shares at a great price for a buy and hold investment. BWX is best known for its Sukin premium skincare brand. Thanks largely to its growing popularity the company reported a 25% jump in net profit after tax to $12 million. With the product range due to launch in Boots pharmacies in the UK shortly, I’m optimistic on the company’s future. At 21x estimated FY 2017’s earnings according to CommSec, I believe this is relatively cheap for its growth prospects.

Monash IVF Group Ltd (ASX: MVF)

This leading IVF specialist has also dropped 20% in the last month in response to rival Virtus Health Ltd (ASX: VRT) warning that it was experiencing weakness in the industry. Although conditions may be weaker, Monash IVF has a habit of outperforming the industry. Last year its IVF patient treatments in Australia grew 12.9% compared to the industry average 8.2%. At 14x estimated FY 2017’s earnings Monash IVF looks like a bargain to me. However, investors may want to hold off investing until after it provides an update at its AGM on November 24.

TPG Telecom Ltd (ASX: TPM)

In the last three months the telco giant’s share price has lost 44% of its value, leaving its shares trading at just 18x forecast full year earnings. An underwhelming full year profit guidance and concerns over NBN margins were largely to blame. I feel these concerns have been overblown and expect that TPG Telecom will still deliver strong earnings growth over the next five years. This could make it a great time to add the company to your portfolio in my opinion.

If you need to make room in your portfolio for either of these shares I would suggest you swap out these rotten shares if you own them. Each could be holding your portfolio back and doing more harm than good.

3 Rotten Shares to Sell, and 1 to Buy Today

After a double-digit rally for the ASX since 2016 lows, investors should be on high alert. You'll find a full rundown below of 3 shares we think you should avoid today plus one top pick worth buying, even if the market turns south and the RBA keeps rates at an "emergency low." Simply click here to uncover these stocks.

Motley Fool contributor James Mickleboro has no position in any 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 Bruce Jackson.

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