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Why Ramsay and these ASX shares just hit 52-week lows or worse

With the S&P/ASX 200 Index (ASX: XJO) melting down because of the coronavirus outbreak, a large number of shares have fallen materially this month.

Three popular shares that have just dropped to 52-week lows or worse are listed below. Here’s why they are making new lows:

Cochlear Limited (ASX: COH)

The Cochlear share price dropped to a 52-week low of $159.86 on Friday. Investors were selling the hearing solutions company’s shares last week after it withdrew its earnings guidance and lost its appeal in the US Court of Appeals. The latter is in relation to a patent infringement lawsuit by Alfred E. Mann Foundation (AMF) for Scientific Research and Advanced Bionics (AB). The Court affirmed the previous decision and ordered the company to pay US$268 million of damages to AMF and AB.

Ramsay Health Care Limited (ASX: RHC)

The Ramsay share price sank to a multi-year low of $50.86 last week. The catalyst for this decline was an announcement out of the private hospital operator which revealed that it was withdrawing its guidance for FY 2020 due to the coronavirus outbreak. Also weighing on its shares was a broker note out of Morgan Stanley which rated it as a sell. It has concerns over the margins of its Australian business and the value proposition of private health insurance.

Serko Ltd (ASX: SKO)

The Serko share price dropped to a record low of $1.10 on Friday. Investors were selling the market leading travel and expense technology solution provider’s shares after it announced that it would be withdrawing its guidance for FY 2020. Serko was previously aiming for total operating revenue growth at the low end of its guidance range of 20% and 40% for the 12 months ending March 31. However, the unprecedented conditions in the travel market have put an end to this guidance and significant pressure on its shares. One positive is the company has a strong balance sheet and appears well-placed to weather the storm.  

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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 Cochlear Ltd. and Serko Ltd. The Motley Fool Australia has recommended Cochlear Ltd., Ramsay Health Care Limited, and Serko Ltd. 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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