This year is on course to be a highly successful one for Australian investors. Barring an end of year pullback, the S&P/ASX 200 Index (ASX: XJO) is currently on track to record a gain of over 12% in 2021.
Unfortunately, not all shares have been able to follow the market higher this year. The two ASX shares listed below, for example, have lost over 50% of their value since the start of the year.
While this is very disappointing, the team at Bell Potter is tipping a big rebound in 2022. Here’s why they could be buys:
A2 Milk Company Ltd (ASX: A2M)
The A2 Milk share price is down a disappointing 52% in 2021. This has been caused by a significant reduction in sales and profits due to structural changes in the Chinese infant formula market which management failed to anticipate.
Bell Potter believes that a turnaround is coming and doesn’t believe this is being reflected in its shares. As a result, the broker has named the company among its top picks for 2022 with a buy rating and $7.70 price target.
The broker commented: “We see the scope for EPS to double by FY26e, if A2M can execute on the China offline expansion strategy, while recovering 50% of the lost sales (from FY20-21) in English label IMF. The catalyst to regaining lost English label sales is likely to be border reopening and the return of international students. Exiting the loss making US assets or navigating a turnaround at the MVM asset would likely accelerate this turnaround. We do not see the current share price as reflecting this potential.”
Doctor Care Anywhere Group PLC (ASX: DOC)
The Doctor Care Anywhere share price has been sold off and is down by a whopping 56% year to date to 54.5 cents. This means the telehealth’s company’s shares are now trading 32% lower than their IPO listing price of 80 cents from December of last year.
Bell Potter appears to see this as a buying opportunity for investors. The broker has put a buy rating and lofty $1.30 price target on its shares. This suggests that its shares could more than double in 2022.
Its analysts explained: “DOC experienced exceptional growth during the first 9 months of calendar year 2021 with appointment volumes growing from an average of 30,000 per month in 1Q21 to nearly 40,000 per month by 3Q21. Due to unprecedented demand growth, the company supplemented its supply of doctors with short term contractors which resulted in a decline in margins. DOC has now increased capacity for 45,000 consultations per month from September 2021 and we expect a bounce in margins for the final quarter with ongoing margin growth in CY22.”