Since the start of the year the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has fallen 7.5%.
While this is disappointing, spare a thought for the shareholders of these beaten down shares which have collectively lost almost a third of their value this year. Should you buy these beaten down ASX 200 shares?
The Bellamy's Australia Ltd (ASX: BAL) share price is down a sizeable 27% since the start of the year. This organic infant formula company has come under heavy selling pressure from investors this year due largely to delays in being granted the SAMR accreditation to sell its products in China. This and sales disruption caused by the launch of a new formulation means that the company anticipates full year Australian label revenue growth at the low end of its 0% to 10% guidance range. While this is disappointing I think investors ought to look beyond this short term blip to its strong long-term potential.
The Estia Health Ltd (ASX: EHE) share price has dropped 34% in 2018. News that there will be a Royal Commission into the aged care sector has largely been behind the sharp share price decline this year. Considering the negative impact the banking inquiry had on bank shares, I can't say I'm surprised by the selloff. Although its shares look cheap now, I would suggest investors wait until after the Royal Commission before considering an investment.
The Wesfarmers Ltd (ASX: WES) share price has fallen just over 30% since the turn of the year. The conglomerate's shares have fallen heavily in recent weeks in order to account for the demerger of the Coles Group Ltd (ASX: COL) business. While Wesfarmers' shares look reasonable value at these levels, I would probably choose the spun off Coles business ahead of it at this stage.
