Coca-Cola Amatil Ltd, JB Hi-Fi Limited and Ainsworth Game Technology Limited: Is it time to buy a bargain?

It's time to circle back on distressed stocks and pick up discounts as they recover.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Nothing frustrates investors more than watching their favourite stocks trail downward. You may think it's a good stock, but the market thinks otherwise.

Earnings and growth expectations of the market are what drive prices. If the market can't easily see a stock picking up its earnings, it turns its attention to hotter stocks.

But that could be a blessing in disguise for Foolish investors.

As the daily auction of stocks moves to greener pastures, you have a chance to "circle back" to discarded or beaten-down stocks. They're cheaper, but the company is improving. That gives you time to start loading up before traders and short-term investors return.

Here are three stocks I have been watching that may be worth circling back for.

Ainsworth Game Technology Limited (ASX: AGI) is an electronic gaming machine manufacturer for casinos and gaming venues. Its half-year earnings were down several points, but its investments in its overseas operations are beginning to blossom. International revenue, which now makes up about half of the company's revenue, is growing strongly. Ainsworth may deliver better earnings in the short term.

JB Hi-Fi Limited (ASX: JBH), the specialty electronics retailer, should benefit from further interest rate cuts in two ways. One, its larger-ticket items like TVs, computers and white goods become more affordable when customers have extra disposable income. Two, lower rates will fuel a growing housing market. Property buyers will purchase more of these items to furnish new homes. Retail in general may be a little sluggish, but that allows stock pickers time to research and prepare wisely.

Coca-Cola Amatil Ltd (ASX: CCL) is making a recovery in share price, up 14% since the end of December. It's just at the start of its restructuring program, so progress will take some time. However, it is cutting costs and recently negotiated a deal with The Coca-Cola Company to invest US$500 million into Coca-Cola Amatil's Indonesian business for a 29% stake in the Indonesian bottler. That frees up needed funds to concentrate on turning around the Australian business, its biggest revenue generator. I would be watching this company closely.

Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned.  The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »