Although the market has bounced back reasonably strongly from its March 23 low, a number of shares are still trading at a deep discount to their highs.
Three shares that are down 50% since the start of the year are listed below. Are they in the bargain bin at these levels?
Accent Group Ltd (ASX: AX1)
The Accent Group share price is down 51% since the start of 2020. The closure of its store network (which includes retail chains such as HYPE DC and Platypus) due to the coronavirus pandemic has weighed heavily on its shares. While this closure will inevitably make a large dent in its earnings in FY 2020, I expect the company to bounce back strongly when the crisis passes. So with its shares changing hands at an estimated 12x FY 2021 earnings, I think now could be an opportune time to invest with a long term view.
Nearmap Ltd (ASX: NEA)
The Nearmap share price has lost 52% of its value since the start of the year. Interestingly, the majority of the aerial imagery technology and location data company's share price decline is not related to the coronavirus pandemic. Investors were selling off its shares long before the crisis unfolded following a downgrade to its guidance. This was driven by a number of downgrade/churn events from large customers. The good news is that things appear to have stabilised since then even during the pandemic. Another positive is that the company has cut costs dramatically and expects to be cash flow breakeven by the end of the financial year. This means the risk of a dilutive capital raising is now very small. In light of this, the quality of its product, and its massive market opportunity, I believe it would be a great long term option for patient investors.
Qantas Airways Limited (ASX: QAN)
The Qantas share price has fallen 52% since the start of 2020. This has of course been driven by the coronavirus pandemic and the significant impact it is having on global travel and tourism markets. While the near term will inevitably be difficult for Qantas, it recently struck a deal for a total of $1.05 billion of additional liquidity. I believe these funds will be more than sufficient to see Qantas through the crisis, especially given how well Australia has flattened the curve. So, as long as there isn't a second coronavirus wave, I believe Qantas could prove to be a good investment at the current price.
