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Should you buy Blackmores and 2 other beaten down ASX 200 shares?

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has had an impressive start to the year. Since the turn of the year the benchmark index has put on a gain of almost 10%.

Unfortunately, not all shares have been able to push higher with the market. In fact, the three shares listed below have fallen heavily since the start of the year. Is this a buying opportunity?

The Blackmores Limited (ASX: BKL) share price has fallen 23% since the start of the year. The health supplements company’s shares fell heavily last month after the release of a very disappointing half year result and the surprise resignation of its CEO a few days later. In the first half of FY 2019 Blackmores delivered a flat profit result and warned that its second half result would be lower due to weakness in China. Traditionally the second half has been the strongest. Although its shares are looking a little more attractive at this level, I would suggest investors stay clear of them until its performance improves greatly.

The Challenger Ltd (ASX: CGF) share price has tumbled 12.5% in 2019. The catalyst for this decline was the release of weak first half result. For the six months ending December 31, Challenger generated revenue of $893.5 million and net profit after tax of $6.1 million. This was a decline of 20.8% and 96.9%, respectively, on the prior corresponding period. Although there is a large market opportunity for the annuities company and its valuation appears undemanding, I’d like to see a bit more consistency before investing in its shares.

The Costa Group Holdings Ltd (ASX: CGC) share price has lost a sizeable 30% of its value since the turn of the year. The horticulture company’s shares came under pressure after the sudden deterioration in trading conditions late last year. This led to Costa posting a 2.4% decline in revenue and a 42% decline in EBITDA before SGARA, material items, and amortisation during the six months to December 30. The good news is that management advised that: “During February solid price recovery has been experienced across our categories from the earlier challenging period.” In light of this, it expects calendar year 2019 profit growth of at least 30%. I think this could make it worth taking advantage of this share price weakness to pick up shares.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited, Challenger Limited, and COSTA GRP FPO. 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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