The ASX 200 has had a positive start to 2019 and is on course to finish the first month with a gain of at least 6%.
Unfortunately, not all shares have performed as well as the benchmark index during the period.
Three that have fallen heavily so far in 2019 are listed below. Should you buy these beaten down ASX shares?
The Costa Group Holdings Ltd (ASX: CGC) share price has fallen 25% since the start of the year. The horticulture company's shares were sold off at the start of the year after it revealed a surprising deterioration in trading conditions. A sudden decline in demand for its tomatoes, berries, and avocados means the company is going to fall short of its calendar year 2018 guidance. In addition to this, management warned that if conditions do not improve, its earnings for the 12 months to June 2019 are likely to be flat instead of its guidance for low double-digit earnings growth. While I think Costa's shares are attractively priced if trading conditions improve, I'm holding off an investment until this is proven to be the case.
The Galaxy Resources Limited (ASX: GXY) share price is down 9% since the start of the year and 40% since this time last year. Concerns about falling lithium prices have weighed heavily on Galaxy and its lithium miner peers over the last 12 months. These concerns have proven to be valid, with Galaxy recently reporting a 30% quarter on quarter decline in its average cash margin. Unfortunately, things may get worse before they get better. Management advised that there has been a further reduction in the contracted price of spodumene so far in 2019. As a result, I would stay clear of Galaxy until lithium prices have bottomed.
The ResMed Inc. (ASX: RMD) share price is down 19% in 2019. The sleep treatment-focused medical device company's shares have come under heavy selling pressure after last week's solid second quarter result fell short of the market's high expectations. I think that this selloff has been severely overdone and has left the shares of one of Australia's highest quality companies trading at a very attractive level for a buy and hold investment.
