The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) may have carved out a solid gain of 10.3% excluding dividends over the last 12 months, but not all shares have been able to follow the market higher.
In fact, the three shares listed below have been thoroughly beaten down during this time. Is this a buying opportunity?
The Ainsworth Game Technology Limited (ASX: AGI) share price has fallen 57% since this time last year. A 37.2% decline in normalised profit after tax to $31.4 million in FY 2018 caused by competitive activity and delays in regulatory approvals and game releases has been the catalyst for this share price decline. However, management does appear optimistic that its performance will be much better in FY 2019. I think Ainsworth Game Technology’s shares do look attractive at these levels, but I intend to wait for a trading update before deciding whether to invest.
The G8 Education Ltd (ASX: GEM) share price has tumbled 44.5% over the last 12 months. The company’s shares have come under significant pressure during this time due to concerns over the oversupply of childcare centres. G8 Education finished the first half of FY 2018 with an occupancy level of just 70.1%. This unsurprisingly led to the company posting a 21% decline in underlying earnings before interest and tax on the prior corresponding period. I don’t expect this oversupply issue to go away any time soon, which could lead to G8 Education underperforming for some time to come.
The iSentia Group Ltd (ASX: ISD) share price has lost 81% of its value over the last 12 months. Investors have been hitting the sell button in a hurry after the media monitoring company’s performance continued to deteriorate. The final straw for many shareholders appears to have been its FY 2018 results where the company reported an 11.6% decline in statutory revenue and a 31% decline in EBITDA. Unfortunately, management expects similar declines in FY 2019. I would stay clear of iSentia despite how cheap its shares look.
Instead of iSentia I would be buying these top blue chip shares which have been tipped to beat the market this year.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended iSentia 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.