Should you buy these beaten down ASX 200 shares?

A return to form in 2019 means that the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has carved out an impressive gain of 4% over the last 30 days.

Unfortunately, not all shares on the benchmark index have managed to follow it higher.

Three shares that have fallen hard since this time last month are listed below. Here’s why they are deep in the red:

The Bega Cheese Ltd (ASX: BGA) share price has tumbled 16% lower since this time last month. Investors have been heading to the exits in their droves after a disappointing market update from the food company revealed that its financial performance has been impacted by the droughts. A significant increase in farming costs and ultimately farm gate milk prices means management expects a normalised profit after tax in the range of $44 million and $48 million. At worst this will be flat on FY 2018’s result and at best it would be 9% growth. While I think its shares look reasonably good value now, it might be best to wait for its results before making an investment.

The Orocobre Limited (ASX: ORE) share price has fallen 12.5% over the last 30 days. The catalyst for this decline was an update on its lithium pricing during the December quarter last month. Management advised that it averaged a price of US$10,800 per tonne for its lithium carbonate during the quarter, down 15% from the US$14,699 per tonne it commanded in the September quarter. Soft market conditions in China have been blamed for the fall in prices. I’m holding off an investment in Orocobre and its peers until prices stabilise or show signs of improvement.

The Premier Investments Limited (ASX: PMV) share price has dropped 10% since this time last month. The majority of Australian retail shares have come under pressure over the last few weeks amid concerns that Christmas trading may have been weaker than expected. A surprisingly weak trading update from outdoor retailer Kathmandu Holdings Ltd (ASX: KMD) last week didn’t help investor sentiment. In addition to this, Premier Investments generates meaningful revenue in the UK through its Smiggle brand and could be impacted by the Brexit. I’m a big fan of Premier Investments but, once again, I think it might be best waiting to see how retailers have performed during Christmas before considering an investment.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments 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.

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