The Australian share market may have had a strong start to 2019, but not all shares have managed to follow it higher.
Three shares that have significantly underperformed the market since the start of the year are listed below. Is this a buying opportunity?
The Catapult Group International Ltd (ASX: CAT) share price is down 15.5% since the start of the year and 64% over the last 12 months. Although the sports analytics and wearables company recently reported solid growth from its core Elite business, the performance of its hyped Prosumer business was thoroughly underwhelming. So much so, management is pulling back planned investments, making the future of Prosumer business appear uncertain. In addition to this, the company's CEO has just resigned less than two years into the job. While its shares could prove cheap if it returns to form, I would stay clear of Catapult for the time being.
The Costa Group Holdings Ltd (ASX: CGC) share price is down 34% year to date. The horticulture company's shares have come under pressure this year after it revealed that trading conditions had suddenly deteriorated, leading to a fall in demand for its tomatoes, berries, and avocados. As a result, it will fall short of calendar year 2018 guidance and could miss its guidance for the 12-month period to June 2019 if things don't improve. In respect to the latter, management had previously provided guidance for low double-digit earnings growth. I'm a fan of Costa but I'd suggest investors wait for a trading update before making an investment, just in case the tough trading conditions have persisted.
The ResMed Inc. (ASX: RMD) share price has tumbled 14% in 2019. The driver of this decline was the sleep treatment-focused medical device company's second quarter results release last month. Although ResMed delivered solid profit growth during the quarter, it fell short of the market's lofty expectations. I think this selloff has been an overreaction and created a buying opportunity for investors. Especially given ResMed's positive long-term outlook thanks to its leading position in a sleep treatment market tipped to grow at a solid pace over the next decade.
