Although the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has been on a strong run in the last few weeks and brought its year-to-date return to a solid 5.5%, not all shares have fared so well.
Three shares which have been beaten down this year are listed below. Are they bargain buys now?
The Baby Bunting Group Ltd (ASX: BBN) share price has fallen over 42% this year. Unfortunately for the baby products retailer, it has become a victim of its own success. Due to a number of competitors going out of business, clearance activities in the industry have weighed heavily on its margins. However, I expect this to only be a temporary headwind and believe the company will ultimately be in a stronger position due to these closures. This could make it worth a look at the current price.
The Mayne Pharma Group Ltd (ASX: MYX) share price is down over 53% since the start of the year due to pricing pressures in the U.S. generic drugs market. These pressures recently led the world's biggest generic drugs seller, Teva Pharmaceutical, to report a 37% decline in quarterly profit from its generic drugs segment. Unfortunately I think it would be best to stay clear of Mayne Pharma until there is a recovery in generic drugs prices. Next week the company will hold its annual general meeting and hopefully provide a bit more colour on things.
The Sigma Healthcare Ltd (ASX: SIG) share price has tumbled 42% year-to-date. The pharmacy wholesale and distribution company has seen its shares come under significant selling pressure due to a dispute with one of its biggest customers My Chemist/Chemist Warehouse Group (MC/CW). Although the dispute has been resolved now, there are concerns that MC/CW may jump ship when its supply contract expires in June 2019. This would leave a large gap in its earnings which would not be easy to fill. In light of this, I think earnings could go backwards for a few years, making Sigma one to avoid.
