Small and micro-cap stocks can sometimes be known for their volatility, both on the upside as well as the down. This can provide opportunities when previously high expectations evaporate, and shares drop like a stone.

The following are three shares have all taken heavy hits to their share price this year, yet I believe could offer value to shareholders.

Here’s why:

Lifehealthcare Group Ltd (ASX: LHC) – market cap of $56 million, down 61% for the year

Lifehealthcare shares have been smashed in the aftermath of a dismal interim report and investor fears over the pricing of prosthetics, which are reportedly very high. Prosthetics account for a significant amount of Lifehealthcare’s revenue, although management has stated that media reports have overestimated price variations. At today’s prices, much of the impact of both poorer operating performance and a hit to prosthetic sales (which may not even materialise) appears to be priced in, and with Lifehealthcare continuing to diversify its product range and revenue sources, I believe the company is decent value today.

I am strongly considering buying more Lifehealthcare shares at today’s prices.

Yellow Brick Road Holdings Ltd (ASX: YBR) – market cap of $79 million, down 51% for the year

Yellow Brick Road (“YBR”) shares plummeted over the past year as investor fears of a slowdown in mortgage lending as well as cash flow concerns became apparent. YBR indicated that its strategy is to focus on growing market share over the long term, rather than short-term profitability. This is likely bad news for the share price – especially with cash dwindling – although good news for investors with patience to look through near term falls. The recent purchase of online investment company brightday will likely prove an increasingly important avenue for customer engagement over time. With new products in the works and rapidly growing revenues and market penetration, Yellow Brick Road appears solid value at today’s prices.

I recently bought more shares at $0.19 and am not interested in buying any more, however I would be comfortable buying in to the company at today’s prices.

Yowie Group Ltd (ASX: YOW) – market cap of $102 million, down 13% for the year

Although Yowie shares are down just 13%, they’re significantly cheaper than prices of $1 or more which have prevailed for most of the last year. The recent falls came on the back of litigation against the company as well as a relocation of manufacturing operations to a new facility. Yowie sales have been growing rapidly thanks to a number of recent retailer signings, and with management heavily incentivised to sign more accounts, this could be set to grow further. Yowie also has a catalyst for re-rating thanks to its contract to produce the Angry Birds chocolate figures, which will be released to coincide with the eponymous movie this month.

With demand growing rapidly, Yowie appears to be decent value today even if the Angry Birds venture is a flop. I recently topped up at 70 cents, and am considering buying more under 60 cents.

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Motley Fool contributor Sean O'Neill owns shares of LifeHealthcare Group Limited, Yellow Brick Road Holdings Limited, and Yowie Group Ltd.. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.