While the Australian share market is home to many quality shares with strong long-term growth prospects, not all shares have positive outlooks.
The three shares below are ones I would suggest investors avoid right now. Here's why:
JB Hi-Fi Limited (ASX: JBH)
Although there is speculation that Amazon's launch in Australia may be delayed slightly, I still wouldn't suggest investors consider snapping up shares of this electronics retailer. Considering the negative impact that Amazon has had on similar retailers in the United States and the United Kingdom, I don't see any reason to believe that JB Hi-Fi will fare any better.
Mayne Pharma Group Ltd (ASX: MYX)
Whilst I am a big fan of this pharmaceutical company, until conditions improve in the generic drugs market I will be staying clear of it despite how cheap it appears. Due to pricing pressures I fear there is a chance that earnings growth will be somewhat tepid or even non-existent in FY 2018. Investors may get an idea of how Mayne Pharma is performing next week when generic drugs giant Teva Pharmaceuticals provides its latest quarterly update. I'll be looking for signs of improvement in the industry.
Slater & Gordon Limited (ASX: SGH)
This embattled law firm's shares have fallen a massive 69% since the start of the year. While this may make Slater & Gordon look like a bit of a bargain, I would caution against an investment. Despite the hard work it has done at restructuring its business, Slater & Gordon recently reported a further $39 million in cash outflows for the year. I'm not convinced it will be profitable any time soon, making this a far too risky investment in my opinion.
