The market may have pushed notably higher over the last few days, but not all shares have been so fortunate.
During this time the three shares listed below have been thoroughly beaten down. Is this a buying opportunity for investors?
The BWX Ltd (ASX: BWX) share price is down a sizeable 23% so far this week. The personal care products company’s shares have come under significant selling pressure following the release of a trading update that revealed that management expects normalised earnings before interest and tax to be flat in FY 2019. While this guidance is bad enough, investors appear concerned that the company needs a massive second half in order to achieve it. While management has blamed disruptions caused by the failed takeover bid, it is worth remembering that sales of its key Sukin range were already declining at the end of FY 2018. Because of this, I’m a touch sceptical that this will be a quick fix. And although its shares look cheap now, I’m going to wait and see if there is a major improvement in the second half before investing.
The Corporate Travel Management Ltd (ASX: CTD) share price has been smashed and is down 27.5% this week. The corporate travel specialist’s shares crashed lower on Wednesday after returning from their trading halt following the release of a response to a short seller report. Although the company’s rebuttal was comprehensive, investors appear to have panicked and sold off its shares regardless. While I think the selloff was largely unjustified and this could be a buying opportunity, it may be best to wait for everything to blow over before making a move.
The Kogan.com Ltd (ASX: KGN) share price has crashed 39% lower this week due to the release of a disastrous trading update on Monday. Management revealed that Kogan.com has had a very poor start to the year due to a surprising 27.4% decline in Global Brands revenue. This has been blamed on changes in the GST law effective from July 2018 and “the now apparent avoidance of GST by a number of foreign websites selling into Australia.” While its shares do look cheap, I think investors ought to wait for more details at its AGM in a couple of weeks before deciding whether to invest.
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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 BWX Limited and Corporate Travel Management Limited. The Motley Fool Australia has recommended Kogan.com 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.