While tech shares including Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX) have won a lot of admirers over the last 12 months and seen this reflected in their respective share price performances, there are several once-popular shares that can be firmly put in the “unloved” category by investors.
With their shares down considerably during this time, is now an opportune time to invest?
Monash IVF Group Ltd (ASX: MVF)
This fertility treatment company’s shares have come under pressure over the last 12 months due to the arrival of a low-cost operator in the market and the loss of one of its key doctors. In respect to the latter, Dr Lynn Burmeister parted ways with Monash IVF in September 2017 and agreed to not practice within 50km of its clinics in Hawthorn, Richmond and/or Clayton for a 12-month period. This non-compete clause comes to an end shortly and is expected to have a negative impact on Monash IVF’s financial performance in FY 2019. Management has previously warned that her departure could result in a “percentage decline in Net Profit After Tax of up to high single digits…”. While this may now be reflected in its share price and the low earnings multiple it trades on, I would wait for signs of improvement before investing.
Telstra Corporation Ltd (ASX: TLS)
Although the shares of this telco giant have bounced off their multi-year lows, they have still lost a third of their value over the last 12 months. Concerns over the sustainability of its dividend, a lack of investor confidence in its 2022 strategy, and an increasingly competitive market have been the main catalysts for the decline. While I do see a lot of value in its shares at these levels, I think they are likely to remain under pressure until there is clarity on its FY 2019 dividend. Especially given how some analysts have speculated that it could be slashed significantly.
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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 Telstra Limited. The Motley Fool Australia owns shares of Altium and Appen Ltd. The Motley Fool Australia has recommended Monash IVF Group Ltd. 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.