Yesterday I talked about a number of shares which had just stormed to new 52-week highs.
Unfortunately not all shares have fared as well during the last 12 months, with some even falling to the dreaded 52-week low. Will they bounce back?
The Covata Ltd (ASX: CVT) share price fell to a 52-week low of 2.9 cents yesterday. This latest decline means the security solutions provider's shares have now lost a whopping 88.4% of their value in the last 12 months. Whilst I think data security is an important and potentially lucrative market, the company has so far failed to make a meaningful impact in the industry. So much so, during the last quarter the company had cash receipts of just $45,000, with cash outflows of $3.4 million. Whilst it is working on reducing its cash burn and updating its product range, I would suggest investors give Covata a miss.
The Quintis Ltd (ASX: QIN) share price dropped to a multi-year low of 36 cents on Thursday. This embattled sandalwood plantation manager's shares fell sharply earlier this year when a US-based research firm compared its business model to a Ponzi-scheme and said its shares were worthless. Quintis' shares then tumbled even further this week when management revealed that they had only just become aware that a major supply agreement with Galderma had been cancelled in December. Avoid Quintis at all costs would be my advice.
The Vita Group Limited (ASX: VTG) share price hit a 52-week low of $1.45 yesterday after the retailer announced that it was working with Telstra Corporation Ltd (ASX: TLS) on remuneration and other commercial terms to deal with "the challenges that lie ahead." Vita Group currently operates 107 Telstra retail stores, but there are concerns that it could lose a portion of these as Telstra reorganises its store network into clusters. While this sell-off could prove to be a huge overreaction and an opportunity to buy shares on the cheap, I would hold off an investment until things become clearer.
