The Australian share market has been in fine form in 2019, with the All Ordinaries index one of the best performing indices in the world with a gain of ~18%.
However, not all shares on the index have been able to follow it higher this year.
Three that have been hammered are listed below. Is this a buying opportunity?
The Costa Group Holdings Ltd (ASX: CGC) share price has been amongst the worst performers on the index this year with a decline of 45%. The horticulture company’s shares have fallen heavily due to a series of guidance downgrades due to tough trading conditions and pricing pressures. Whilst I’m not convinced that the worst is over for Costa just yet, I do think this risk has been priced into its shares. This could make it worth considering a long-term and patient investment in the company’s shares.
The Syrah Resources Ltd (ASX: SYR) share price has lost almost 43% of its value since the turn of the year. Investors have been selling the graphite producer’s shares due to concerns over weakening prices of the battery-making ingredient and higher than expected operating costs. In addition to this, a recent capital raising undertaken at a material discount has also weighed on its shares. And with graphite prices unlikely to improve in the near term because of falling demand in China, I suspect that Syrah’s shares may not have bottomed yet.
The Wagners Holding Company Ltd (ASX: WGN) share price has sunk a sizeable 41.5% since the start of the year. Investors have been heading to the exits after the building products company revealed a cement supply pricing dispute with Boral Limited (ASX: BLD). Boral has sourced cement from a different supplier at a cheaper price and Wagners is required to match it or suspend its supply contract. Wagners has disputed Boral’s pricing notice and risks losing a very large customer if its Statement of Claim fails. In light of this, I would stay clear of its shares until the matter is resolved.
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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 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.