Despite a recent spot of weakness, over the last 12 months the S&P/ASX 200 has managed to carve out a gain of 7.3% excluding dividends.
Unfortunately, not all shares on the market have been able to follow it higher. In fact, the three shares listed below have lost more than half their value during the period. Is this a buying opportunity?
The Clean TeQ Holdings Limited (ASX: CLQ) share price has fallen 55% over the last 12 months. For those that are unfamiliar with the company, Clean TeQ is the owner of the Sunrise project in New South Wales. Sunrise is one of the largest cobalt deposits outside Africa and also has one of the largest and highest grade accumulations of scandium ever discovered. Last year cobalt prices rocketed higher and continued to do so until March of this year. But since then prices have crumbled and cobalt-focused companies have seen their shares do likewise. I’m not overly convinced that cobalt prices have bottomed yet, which could mean further pressure on the Clean TeQ share price in the coming months.
The iSelect Ltd (ASX: ISU) share price is down over 52% since this time last year despite the fact that its shares have risen strongly over the last few months. Investors hit the sell button in a hurry when the price comparison company advised of a sudden deterioration in its performance earlier this year. This downturn ultimately led to a sharp drop in profits and the resignation of its CEO. In FY 2018 iSelect posted a net loss after tax of $13.5 million compared to a profit of $16.4 million a year earlier. While things appear to be improving for iSelect, I would suggest investors wait to see how it performs in the first half before considering an investment.
The Slater & Gordon Limited (ASX: SGH) share price has risen strongly this week but is still down over 56% over the last 12 months. While yesterday’s announcement of the launch of the Get Your Super Back campaign could be a big positive for the law firm if it is a success, I’d suggest investors continue to stay clear of its shares. After all, management has continued to draw shareholder attention to the fact that its shares may be overvalued. Only last month it reminded shareholders that an independent expert’s report prepared by KPMG valued the shares in the range of 30 cents to $1.10. Slater & Gordon’s shares are currently priced at $3.05.
Instead of Slater & Gordon I would be looking at this buy-rated share which has been tipped to shine.
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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 Scott Phillips.