Shares like CSL Limited (ASX: CSL) and Zip Co Ltd (ASX: Z1P) have been charging higher in recent weeks and hit all-time highs on Monday. It seems as though they can do no wrong in the eyes of investors.
Unfortunately, not all shares are viewed in such positive light. Three unloved shares are listed below. Should you buy them?
AMP Limited (ASX: AMP)
It has been another difficult year for AMP and its shareholders. Since the start of the year the embattled financial services company’s shares have dropped 31%. This has been driven by the negative impacts of its appearance at the Royal Commission, the subsequent fund outflows it has experienced, and an extremely dilutive $650 million capital raising. Although I think that the worst is now over for AMP, I feel it is still a little too soon to rush in and buy shares. I would suggest investors wait see if its turnaround is a success before looking at an investment.
Blackmores Limited (ASX: BKL)
This former market darling has been out of form in 2019. Weakness in the key China market has weighed heavily on its performance, leading to Blackmores posting a 24% decline in full year net profit after tax to $53 million. And with trading conditions expected to remain tough in FY 2020, investors have been selling off its shares. So much so, the Blackmores share price is down 32% this year. Whilst its shares are trading at an attractive level now, I feel it is still too soon to invest. Especially given the strong rise in short interest in recent months. Short sellers clearly believe things are going to get worse before they get better.
Domino’s Pizza Enterprises Ltd (ASX: DMP)
Domino’s Pizza continues to be a highly divisive share and it isn’t hard to see why. I’ve lost count of how many times the pizza chain operator has fallen short of its guidance in recent years. In fact, Domino’s did it so often it has decided to no longer provide guidance. This poor performance has led to its shares losing over a third of their value during the last three years. Whilst this is disappointing for shareholders, I think it is a buying opportunity for investors that are willing to make a patient long term investment. Especially given the company’s significant expansion plans.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. The Motley Fool Australia has recommended Domino's Pizza Enterprises Limited. 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.