3 ASX shares to buy for the turnaround

These 3 ASX shares could be worth buying for the turnaround story.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There are many ASX shares that say they will deliver a turnaround for shareholders, but not all of them can.

It can be quite hard for a business to turn issues around. Some businesses never do, but when they do it can lead to rapid share price recoveries for shareholders.

These are three potential turnaround stories:

BWX Limited (ASX: BWX)

BWX is the natural beauty business that owns Sukin and several other brands. It has seen its share price fall by 60% over the past year after a botched takeover by private equity as well as questions surrounding the growth of its current stable of brands.

FY19 may not be as good as expected due to all of the distractions, however FY20 could be a year of focused management, synergies being realised and the reappearance of pleasing organic growth again.

BWX is currently trading at 11x FY19's estimated earnings with a trailing grossed-up dividend yield of 3.6%.

Myer Holdings Ltd (ASX: MYR)

Myer has been one of the most disappointing investments on the ASX over the past five years.

However, new CEO John King has the confidence of major Myer shareholders including WAM Capital Limited (ASX: WAM). It wouldn't take much to turn Myer around in the short-term and grow profit, which could provide a quick boost for the share price.

Myer is currently trading at under 11x FY19's estimated earnings.

MNF Group Ltd (ASX: MNF)

MNF is one of Australia's leading voice over internet protocol (VoIP) businesses. Its share price has fallen 37% over the past year due to negativity about the Pennytel business, rising interest rates and projected growth that isn't as much as hoped.

The company continues to deliver pleasing organic growth and it has a number of initiatives like the Singapore expansion plans which could materially surprise the market over the next couple of years.

It's currently trading at under 20x FY20's estimated earnings with a grossed-up dividend yield of 3%.

Foolish takeaway

There is a genuine chance that all three of these shares may beat the market over the next year or two. Myer has the toughest job to turn things around, so I'm more inclined to pick MNF Group and BWX at the current prices.

Motley Fool contributor Tristan Harrison owns shares of BWX Limited. The Motley Fool Australia owns shares of and has recommended BWX Limited and MNF Group Limited. 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.

More on Bank Shares

A corporate female wearing glasses looks intently at a virtual reality screen with shapes and lights representing Block shares going up today
Bank Shares

Are Westpac shares a buy following the bank's big tech update?

Is now a good time to buy the banking giant's shares? Let's find out.

Read more »

Different Australian dollar notes in the palm of two hands, symbolising dividends.
Bank Shares

Own CBA shares? It's payday for you!

A dividend is heading to CBA shareholders’ bank accounts.

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Bank Shares

Are CBA shares really worth $120?

It has been a good year for ASX bank shareholders.

Read more »

a group of people sit around a computer in an office environment.
Bank Shares

Westpac shares push higher on $9.8b technology simplification plan

Westpac plans to spend big on technology to close the gap on its rivals.

Read more »

A worried woman looks at her phone and laptop, seeking ways to tighten her belt against inflation.
Economy

NAB boss issues dire prediction for Aussie economy

NAB’s CEO has issued a stark warning on the outlook for Australia’s economic growth.

Read more »

Contented looking man leans back in his chair at his desk and smiles.
Bank Shares

Own CBA shares? Here's the tech stock the banking giant just invested in

CBA has made an interesting investment. Here's what you need to know.

Read more »

A woman gives two fist pumps with a big smile as she learns of her windfall, sitting at her desk.
Bank Shares

ANZ shares charge higher on $57.5 million class action settlement news

ANZ shares have continued their positive run on Monday.

Read more »

Two people comparing and analysing material.
Bank Shares

Better buy: CBA or Westpac stock?

Which ASX bank share is a better buy?

Read more »