Due to declines in their respective share prices this year, there are a number of shares on the market trading at dirt cheap prices.
Despite this, I wouldn't be in a rush to buy all of these shares. Here are three which I think investors should avoid:
Harvey Norman Holdings Limited (ASX: HVN)
This electronics and furniture retailer's shares are trading at under 10x trailing earnings at present. But with Amazon now officially launched in Australia, I am concerned that Harvey Norman could experience weak trading this Christmas and in the January sales. This may make it one to avoid until the true impact of Amazon on its business is known.
Mayne Pharma Group Ltd (ASX: MYX)
At a little over 9x trailing earnings this pharmaceutical company will be a great option for investors when conditions in the U.S. generic drugs market improve. However, I'm not convinced that we have seen the worst of it just yet, which could potentially drag Mayne Pharma's shares lower. I would suggest investors wait to see if its half-year results show any signs of improvement early next year.
Myer Holdings Ltd (ASX: MYR)
This department store operator's shares are changing hands at just over 9x trailing earnings. As cheap as this is, I still wouldn't be a buyer of its shares. Regardless of Amazon's arrival in Australia, I feel the Myer business is under significant threat as it loses relevance with shoppers from changes in consumer habits.
