The Australian share market may be trading within sight of multi-year highs, but not all shares have been pushing higher.
In fact, the three shares listed below have been thoroughly beaten down in 2019. Is this a buying opportunity?
The Domino's Pizza Enterprises Ltd (ASX: DMP) share price dropped to a multi-year low of $36.06 on Wednesday, stretching its 12-month decline to a sizeable 30.5%. The pizza chain operator's shares have come under pressure this week after being hit by a class action in relation to the alleged widespread underpayment of delivery drivers and in-store workers employed at franchise stores. Analysts at Citi have warned that this could result in damages of up to $240 million for the pizza chain operator. Whilst this does add an element of risk to an investment, I believe the worst-case scenario has been factored in now. This could make it worth considering Domino's as a patient long-term investment, especially given its strong long-term growth potential thanks to its expansion plans.
The Galaxy Resources Limited (ASX: GXY) share price continued its slide and hit a new multi-year low of $1.24 on Wednesday. Galaxy is one of a number of lithium miners that have fallen heavily over the last 12 months due to a collapse in prices of the battery making ingredient. This has been caused by increasing supply and subdued demand. Unfortunately for Galaxy, experts are tipping prices to go lower before eventually going higher again. In light of this, I would suggest investors wait for signs that lithium prices have hit an inflection point before considering an investment.
The Virgin Australia Holdings Ltd (ASX: VAH) share price hit a bit of turbulence yesterday and fell to a 52-week low of 16.2 cents. The airline operator's shares have come under pressure in recent weeks following the release of a disappointing trading update. That update revealed that Virgin Australia expects FY 2019 underlying earnings to be down by at least $100 million on last year's result. This implies an underlying loss of at least $35.6 million this year and reflects the uncertainty of revenue trading conditions in the domestic market and annual fuel and foreign exchange headwinds in excess of $160 million. Whilst its shares arguably look reasonable value now, I would sooner buy Qantas Airways Limited (ASX: QAN) shares.
