Earlier today I looked at a few shares that have more than doubled in value in 2020.
Unfortunately, not all shares have fared as well as these and some are nursing heavy declines this year.
Three beaten down ASX shares are listed below. Here’s why they are down in the dumps:
A2 Milk Company Ltd (ASX: A2M)
The a2 Milk share price has lost 24.7% of its value since the start of the year. Though, that really only tells you half of the story. The a2 Milk share price was a very strong performer for much of the year and was trading at an all-time high of $20.05 in July. Since then, it has fallen almost 50% to $10.77. This has been driven by weakness in the daigou channel, which is weighing heavily on its infant formula sales in FY 2021. So much so, the former market darling is expecting to post a notable reduction in both sales and earnings this year.
Bravura Solutions Ltd (ASX: BVS)
The Bravura share price has fallen 38.7% in 2020. Investors have been selling the shares of the provider of financial software products and services after COVID and Brexit headwinds impacted its performance negatively. While management is forecasting flat earnings in FY 2021, the market appears concerned by the significant weighting to the second half. Bravura’s chief executive officer, Tony Klim, explained: “…second wave UK lockdowns and stalling Brexit negotiations have increased uncertainty and are slowing the progress of pipeline opportunities in the UK. As a result, Bravura expects FY21 NPAT to be weighted approximately 80% to the second half of FY21.”
Treasury Wine Estates Ltd (ASX: TWE)
The Treasury Wine share price has sunk 43.6% since the start of 2020. The wine company’s shares have been sold off this year after it became a victim of the Australia-China trade war. Treasury Wine revealed that the Chinese tariffs on its wine exports are expected to hit its sales in the country hard. Given that China contributed 30% of its earnings in FY 2020, management is acting fast to limit the damage. This includes the reallocation of its Penfolds Bin and Icon range from China to other key luxury growth market. Though, it has warned that it could take upwards of three years for this plan to reach its full potential.
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Returns as of 6th October 2020
More reading
- Leading brokers name 3 ASX shares to sell today
- Why a2 Milk, Doctor Care Anywhere, McPherson’s, & Volpara are pushing higher
- ASX 200 down 0.85%: ANZ CFO resigns, tech shares tumble, iron ore jumps
- Why brokers slashed their A2 Milk (ASX:A2M) share price target
- What does China have to do with the a2 Milk (ASX:A2M) share price?
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk, Bravura Solutions Ltd, and Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The post Why a2 Milk and these ASX shares have been smashed in 2020 appeared first on The Motley Fool Australia.
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