Are these 3 beaten down ASX shares bargain buys?

The Mayne Pharma Group Ltd (ASX:MYX) share price is one of three being beaten down in 2017. Are they bargain buys now?

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Although the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has been on a strong run in the last few weeks and brought its year-to-date return to a solid 5.5%, not all shares have fared so well.

Three shares which have been beaten down this year are listed below. Are they bargain buys now?

The Baby Bunting Group Ltd (ASX: BBN) share price has fallen over 42% this year. Unfortunately for the baby products retailer, it has become a victim of its own success. Due to a number of competitors going out of business, clearance activities in the industry have weighed heavily on its margins. However, I expect this to only be a temporary headwind and believe the company will ultimately be in a stronger position due to these closures. This could make it worth a look at the current price.

The Mayne Pharma Group Ltd (ASX: MYX) share price is down over 53% since the start of the year due to pricing pressures in the U.S. generic drugs market. These pressures recently led the world's biggest generic drugs seller, Teva Pharmaceutical, to report a 37% decline in quarterly profit from its generic drugs segment. Unfortunately I think it would be best to stay clear of Mayne Pharma until there is a recovery in generic drugs prices. Next week the company will hold its annual general meeting and hopefully provide a bit more colour on things.

The Sigma Healthcare Ltd (ASX: SIG) share price has tumbled 42% year-to-date. The pharmacy wholesale and distribution company has seen its shares come under significant selling pressure due to a dispute with one of its biggest customers My Chemist/Chemist Warehouse Group (MC/CW). Although the dispute has been resolved now, there are concerns that MC/CW may jump ship when its supply contract expires in June 2019. This would leave a large gap in its earnings which would not be easy to fill. In light of this, I think earnings could go backwards for a few years, making Sigma one to avoid.

Motley Fool contributor James Mickleboro has no position in any of the 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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