3 beaten-down bargains to buy in December

Although the last few months have been relatively good for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), not all shares on the Australian index have fared so well.

Three shares have been beaten down to such a degree in recent months that I believe they now appear to be absolute bargain buys. They are as follows:

Appen Ltd (ASX: APX)

Appen is a global leader in speech and search technology services. In the last three months its share price has fallen 24%. As its shares had more than doubled in value prior to the sell off, I believe the drop can be attributable to profit taking. As a result its shares can now be picked up for 22x estimated FY 2017 earnings according to CommSec. Considering its strong growth prospects and debt-free balance sheet, I believe Appen would make a great long-term buy and hold investment.


After another sharp drop today this skincare company has seen its share price plunge around 20% in the last two months. Today’s decline is likely to be the result of concerns over exports to China suffering following the shock update from Bellamy’s Australia Ltd (ASX: BAL) this morning. I think this is an opportunity for investors to buy in at a great price. After all, it’s not all about China for BWX. The Sukin brand has just launched in the UK market through Boots pharmacies.

Mantra Group Ltd (ASX: MTR)

In the last six months Mantra’s shares have fallen 18%, extending their year-to-date decline to a whopping 37%. As one of Australia’s leading accommodation providers with 20,000 rooms under management, I believe the predicted inbound tourism boom puts Mantra in a strong position for long-term earnings growth. With its shares changing hands at 17x estimated FY 2017’s earnings and expected to provide a fully franked 4.4% dividend, now could be an opportune time to invest.

As well as these shares I believe investors should be taking a closer look at these explosive shares. The smart money is on them being big winners next year. Is yours?

Big, Fat, Dividends

This company's dividend is almost the stuff of legends. Its reliable cash flows support a high payout ratio, and the company's stash of franking credits are the cherry on the top of the dividend cake. Based on the last 12-months of dividends, shares are offering a fully-franked 6.5% yield, which grosses up to a whopping 9.3%, when those franking credits are included.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Bellamy's Australia and BWX 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 Bruce Jackson.

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