Over the last 12 months the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has dropped approximately 2.1%.
While this decline is a little disappointing, it is nothing compared to the declines being made by some of the shares on the benchmark index.
The three shares listed below have been hit hard over the period, are they in the buy zone now?
The Bellamy's Australia Ltd (ASX: BAL) share price has plunged 48% lower over the last 12 months due largely to its weak guidance in FY 2019. Because of the disruption caused by the launch of a new formulation of its baby milk, domestic sales are expected to be flat this year. Making things worse is the fact that the company has yet to receive the accreditation required to sell its products on the China mainland. Unfortunately, there are concerns that this accreditation may not be received for some time, potentially stifling its growth in FY 2020 as well. While this is disappointing, I feel it could be worth being patient and holding onto its share for the long term.
The Galaxy Resources Limited (ASX: GXY) share price has tumbled 36% since this time last year. Concerns over future lithium prices have weighed heavily on Galaxy Resources' shares over the period. Especially after a recent update from Orocobre Limited (ASX: ORE) revealed that it experienced a sharp decline in prices during the December quarter. Although Galaxy has some world class assets, a hefty cash balance, and its Mt Cattlin operations is generating strong free cash flows, I would suggest investors wait for improvements in pricing before considering an investment.
The Wesfarmers Ltd (ASX: WES) share price has dropped 26% over the last 12 months. The vast majority of this decline is related to the demerger of the Coles Group Ltd (ASX: COL) business in November. I estimate that this decline means that the conglomerate's shares are trading at 19.5x forward earnings now, which I feel makes them good value today along with the shares of the demerged Coles business.
