Although the All Ordinaries (Index: ^AXAO) (ASX: XAO) has pushed notably higher year to date, not all shares have been able to follow the market higher.
Three shares that have thoroughly underperformed the market and fell to 52-week lows or worse on Tuesday are listed below. Is this a buying opportunity?
The Blackmores Limited (ASX: BKL) share price fell as much as 35% to a 52-week low of $80.45 on Tuesday following the release of a very disappointing half year result. Although the health supplements company posted record half year revenue of $319 million, its net profit after tax came in flat at $34 million. Management blamed the poor profit result on increased investment in sales and marketing and slowing sales growth in China. While its shares look reasonably priced now, I'm staying clear of them until its performance improves. Especially with management warning that sales in China would weaken in the third quarter.
The ELMO Software Ltd (ASX: ELO) share price continued its slide and fell to a new 52-week low of $4.45 yesterday. It is unclear why investors have been selling off the shares of leading provider of cloud-based human resources and payroll solutions, but it has been on a bit of an acquisition spree over the last 12 months. Investors may have concerns over the price paid for some of these bolt-on acquisitions and of course the risk that they don't integrate successfully. While there certainly is a risk of that, I think the risk/reward on offer at this level is compelling for long-term investors.
The Orocobre Limited (ASX: ORE) share price dropped to a 52-week low of $2.90 on Tuesday after the lithium miner downgraded its production guidance for the full year. According to the release, unfavourable weather has impacted production through the dilution of its brine feedstock. As a result, management expects FY 2019 production to be in line with the previous year. This compares to its previous guidance for "higher" year on year production. Due to the company's disappointing operational performance and weakening lithium prices, I would suggest investors stay clear of Orocobre's shares for the time being.
