Despite a positive run last week, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is down approximately 6.5% year to date.
While this decline is disappointing, it is nothing compared to the declines that have been made by the three ASX shares listed below.
Is this a buying opportunity?
The InvoCare Limited (ASX: IVC) share price has fallen 34% in 2018. The funeral company has come under heavy selling pressure this year due largely to weak trading conditions. The industry has been having a tough time this year due to cycling through a strong prior corresponding period which included a severe flu season. In addition to this, InvoCare's profits have been hit by below trend funeral volumes due to a benign flu season and the heavy investment in its Protect and Grow strategy. While I think its shares are looking better value now, I wouldn't be a buyer until its financial performance improved greatly.
The Sigma Healthcare Ltd (ASX: SIG) share price has plunged 42% lower this year. This decline was significantly worse until recent news of a potential merger with rival Australian Pharmaceutical Industries Ltd (ASX: API) sent its shares hurtling higher. If this merger goes ahead then I think the merged entity would be worth considering, but if Sigma has to go it alone then I expect it to struggle over the next couple of years. Especially given the gap in its earnings that will occur when its major supply contract with Chemist Warehouse terminates in June 2019.
The Speedcast International Ltd (ASX: SDA) share price has been smashed in 2018 and is down 47% year to date. The remote communication and IT solutions provider's shares have been hammered this year after a couple of surprising profit downgrades. One of which came last week when Speedcast advised that it expected underlying EBITDA for FY 2018 to be between US$130 million and US$135 million. This compares to its previous downgraded guidance for underlying EBITDA in the range of US$135 million to US$145 million. While I'm not prepared to make an investment just yet, at under 10x estimated full year earnings its shares do look very cheap.
