The Australian share market may be hovering around a multi-year high, but not all shares have managed to follow it higher.
Three shares which have been thoroughly beaten down over the last 12 months are listed below. Are they too cheap to ignore?
The Experience Co Ltd (ASX: EXP) share price has come under pressure over the last 12 months and shed 12% of its value. The catalyst for this decline was a once in a generation weather event that forced the closure of some of its operations temporarily. While this was a disappointment and will impact its earnings this year, it is something which I feel is unlikely to be repeated in FY 2019. In light of this, I think Experience Co shares could be a good option for investors at the current level.
The Greencross Limited (ASX: GXL) share price has fallen 29% since this time last year. The integrated pet care company’s shares have come under pressure after a weak trading update in May which revealed a surprising decline in same store sales for its standalone veterinary businesses. Considering rival National Veterinary Care Ltd (ASX: NVL) hasn’t seen a decline in its clinics, this could be an indication that its in-store veterinary clinic rollout strategy isn’t working. I would suggest investors stay clear of Greencross until its metrics are pointing in the right direction again.
The Sigma Healthcare Ltd (ASX: SIG) share price is down almost 47% over the last 12 months. Shareholders have been heading to the exits in their droves after the pharmacy chain operator and distributor lost its supply contract with Chemist Warehouse. The writing had been on the wall for some time, but it was officially confirmed this week. EBOS Group Ltd (ASX: EBO) won the tender and has estimated it to be worth $1 billion in revenue in the first year of the agreement. While Sigma’s shares do look dirt cheap now, I’m not convinced that this will be the last supply contract it loses. As such, I plan to stay away from the company’s shares for the foreseeable future.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Greencross Limited. The Motley Fool Australia owns shares of EXPERNCECO FPO and NATVETCARE FPO. 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 Scott Phillips.