The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is on course to finish the year with a gain of at least 7%. This is an excellent return in my opinion, especially with the index dropping by 11% early in the year.
Unfortunately not all shares on the ASX have performed as well as the index. In fact, four shares in particular have had a year to forget. But will 2017 be the year they bounce back?
Bellamy’s Australia Ltd (ASX: BAL)
The embattled organic infant formula manufacturer has seen its share price fall 51% this year due to temporary volume dislocation in China. Unfortunately I’m not optimistic on a rebound in 2017. Management appears to have responded to regulation changes in China incredibly poorly and damaged the brand’s appeal in the lucrative market. When its shares finally come out of suspension I can see them dropping lower still.
Blackmores Limited (ASX: BKL)
The share price of this health supplements company has also fallen by 51% this year. As was expected, the company had a weak first quarter which saw net profit after tax drop 46.6% to $12 million. Pleasingly the second quarter has started strongly and management is confident that overstocking has eased. At just 17x estimated FY 2017 earnings and expected to provide a fully franked 4% dividend, I believe Blackmores is an appealing investment. A solid second quarter could be the catalyst to driving its share price higher.
iSentia Group Ltd (ASX: ISD)
It has been a rollercoaster of a year for shareholders of media-monitoring company iSentia. It looks set to finish the year with a decline of around 42% thanks largely to an update in November which revealed its content marketing business was severely underperforming so far in FY 2017. This was a big disappointment as the recently acquired business had been a real shining light in its full year results. Management is confident that it can turn its performance around in the second half of the FY 2017. If it does then I can see investors piling back into iSentia, especially with its shares priced at a reasonable 18x earnings.
Vocus Communications Limited (ASX: VOC)
Boardroom fighting and fears over lower NBN margins were enough to drive the share price of this fast-growing telco company lower by 48% this year. Following the sell-off its shares are changing hands at an estimated 10x FY 2017 earnings. This is an absolute bargain in my opinion and provides investors with a compelling risk/reward. As a result I’m confident that Vocus will bounce back strongly in 2017.
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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. 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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