BWX Ltd (ASX: BWX), Blackmores Limited (ASX: BKL) and NextDC Ltd (ASX: NXT) haven't been outstanding against the S&P/ASX200 this year. However, strong defensible business propositions could keep them in the game for years to come. Are the current prices a good deal for investors?
BWX
BWX is a manufacturer, distributor and marketer of skin, hair and body care products. Products in its portfolio include Sukin, Uspa, Mineral Fusion and Andalou Naturals.
Its share price has sunk 25% today to $150 at the time of writing. This is a result of yet another downgrade in its EBITDA guidance to $21 – $23 million in FY 2019 from $27 – $32 million initially.
BWX has had some wins this year, however. This includes its success in rolling out products with Woolworths Group Ltd (ASX: WOW), Big W, Coles Group Ltd (ASX: COL) and plans to launch in Target this year. Yet, this is offset with its Sukin brand, which is suffering from underperforming promotional activities and inappropriate stocking.
The company also updated that it's new CEO will be David Fenlon effective 1 July. He is BWX's non-executive director and MD of Blackmores for ANZ. Though management does expect to see improvements in 2020, I'd hold off until further news on leadership and product shows for more success.
Blackmores
Blackmores is an Australian company that sells vitamins, herbs, minerals and nutrients. The health company has been struggling acutely within the market as it competes with heavily discounted products, inefficient logistic models and distribution strategies which increase costs.
In its HY earnings call, net profit after tax was flat at $34.3 million. Even then, management isn't expecting any improvement in the second half of 2019. Blackmores has slid almost 40% from the beginning of the year to $89.48 as of yesterday.
However, Blackmores is painfully but aggressively making moves to re-engage large daigou traders. I'll be keeping an eye out on news around management and market penetration strategies in China before I add this to my buy list.
NextDC
NextDC develops and operates independent data centres across Australia. It has data centre infrastructure which allows enterprises to outsource its data via cloud connectivity and services to support these functions.
The company is down 14% since its $7.20 high in February, to $6.32 as of close yesterday. The company also downgraded its FY guidance recently from a range of $180 – $184 million from $183 – $188 million.
However, I'm a strong believer in NextDC's defensible proposition. As we rely more heavily on computing power, the appetite for enterprise data-storage solutions will continue to expand. This puts the company in a strong position to benefit lucratively and is the reason why it's a buy for me.
If these beaten down shares aren't in your investment scope, perhaps you should check out these blue-chip stocks which will be good long-term investments.
