2 great shares at 52-week lows: Is this the bottom?

We take a look at two of the most undervalued rejects of this reporting season: Senex Energy Ltd (ASX:SXY) and Ainsworth Game Technology Limited (ASX:AGI).

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As with every reporting season, FY2014 has delivered a number of big winners and losers, most of them earning the shifts in their share prices.

However there are two small-cap companies that I think have been unfairly slammed despite great reports, and both of these shares now sit right at the very top of my 'to buy' list.

They are:

Senex Energy Ltd (ASX: SXY) – last traded at $0.625, down 19.2% for the year.

Despite record production and earnings results, myopic investors have abandoned Senex Energy lately, sending the price down almost 20% in the past year.

They may have felt that Senex's best growth was behind it given that FY2015 earnings are expected to be largely flat and heavy on capital expenditure.

Readers may be aware those are the very same reasons I sold out of similar company Beach Energy Limited (ASX: BPT) not so long ago, however that company's situation is very different from Senex.

With Senex targeting production of 3-5 million barrels of oil equivalent (up from 1.4 currently), as well as significant reserve increases by FY2018, the stage is set for Senex to virtually triple in size over the next few years.

Senex represents an excellent buy at current prices and I believe it has gone as low as it is likely to in the absence of bad news.

Ainsworth Game Technology Limited (ASX: AGI) – last traded at $3.24, down 11.9% for the year.

Despite profit rising 18%, admirable revenue growth and a rapidly expanding international market, shares in pokie-machine developer Ainsworth responded by falling 10% with investors apparently disappointed with increased costs and slower growth than previously.

Reporting 31 new licenses and explosive international revenue growth of 37% during the past year was not enough to stop the decline, with a number of investors making what I consider to be the extraordinarily poor decision to sell their Ainsworth shares.

Even conservative stockmarket analyst Morningstar believes the company to be undervalued in light of its potential, with returns on invested capital of 20% believed to be sustainable in the long run.

Morningstar estimates 'fair value' of the company to be around $3.90, leaving investors with plenty of scope for improvement in their investment.

Alongside Senex, Ainsworth represents great value at current prices, and looks to have gone as low as it will go without any negative announcements.

While Senex and Ainsworth are among my highest priorities for share acquisitions at the moment, there's another company with great growth prospects that I already own – and trading at a fair valuation to boot.

This small-cap company escapes a lot of investor notice despite its proud performance record and big plans for future expansion.

There's a reason it was selected as The Motley Fool's Top Stock for 2014-2015, and I recommend all interested investors have a look at our free report.

To access it, simply click on the link below and enter your email address – it takes less than 30 seconds – and we'll send it to you, completely FREE!

Motley Fool contributor Sean O'Neill doesn't own shares in any company mentioned.

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