With the Australian share market crashing lower this week, it will come as no surprise to learn that a number of shares have fallen heavily. Some have even dropped to 52-week lows or worse.
Three shares that dropped to new lows on Tuesday are listed below. Is now the time to invest?
The AMP Limited (ASX: AMP) share price crashed to a multi-year low of $1.73 on Tuesday. Investors have been selling the embattled financial services company's shares over the last 12 months due to its appearance at the Royal Commission, its significant fund outflows, and the RBNZ's recent decision to block the sale of its AMP Life business to Resolution Life. With the sale now unlikely to proceed, the company has suspended its interim dividend and there are concerns that a potentially highly dilutive capital raising will be required in the near future to fund its turnaround. I would stay clear of its shares and wait for either the capital raising or a turnaround in its performance.
The Kathmandu Holdings Ltd (ASX: KMD) share price tumbled to a 52-week low of $1.96 yesterday. The adventure retailer's shares have come under pressure this year despite it delivering a solid result in the first half. Kathmandu posted a 13.3% increase in sales to NZ$232 million and a 7.3% lift in net profit after tax to NZ$13.2 million. However, investors appear to have been spooked by comments by the company's CEO, Xavier Simonet. Mr Simonet appeared cautious on its prospects in the second half, advising: "We remain focused on achieving sales and profit growth in our core Australasian business to fund investment for future growth. Our full year result is still very dependent on the key promotions to come, in which we will be cycling a successful second half last year." I would wait for its full year result before picking up shares.
The Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) share price sank to a 52-week low of $20.25 on Tuesday. As with Kathmandu, comments from management appear to have been the catalyst for this share price decline. The investment house posted a record regular profit after tax of $186.7 million in the first half, but managing director, Todd Barlow, warned that the company is "quite cautious at the moment with asset prices remaining high while some early warning signs are emerging with respect to consumer sentiment and economic activity." Given its track record of generating strong returns for shareholders, I feel this decline could be a buying opportunity for investors looking for long-term options.
