2 beaten-down ASX shares with turnaround potential

Amcor Limited (ASX:AMC) is one of two shares which have been hit for six. Could now be a good time to invest?

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We are just about three quarters of the way through the month of June and it’s been quite a rollercoaster for investors. Early in the month the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) made聽a run for 5,400 points, but in a matter of days it fell聽4% lower to聽5,141 points.

It has since retraced some of these declines and is currently down by a touch under 2% for the month. While this聽is not a great performance by any means, I鈥檓 sure shareholders of the two聽shares below would happily trade places.

These two聽shares have had a tough month, but could they bounce back?

Amcor Limited (ASX: AMC)

Shareholders of packaging giant Amcor have seen the value of their holdings decline by over 10% in June following the release of an update on its Venezuelan operations, which have been feeling the pressure of the nation鈥檚 hyperinflation.

The company is taking a one-off charge of $350 million relating to cumulative currency translation losses, and the estimated net asset position of its Venezuelan business as at June 2016. The good news is that after this one-off charge is taken there will be no further material exposure to Amcor鈥檚 balance sheet from its Venezuelan activities.

I think the drop in its share price has now made the shares about fair value at 19x trailing earnings. This could make it a good time for patient long-term investors to get in on the action.

Kathmandu Holdings Ltd (ASX: KMD)

Shares of Kathmandu have dropped by just under 10% in June as investors appear to still believe the outdoor and adventure retailer could be struggling due to the unseasonably warm winter weather.

Whilst the warmer winter weather might be a good thing for operators of coffee houses like Retail Food Group Limited (ASX: RFG), it can be quite troublesome for apparel retailers like Kathmandu and Myer Holdings Ltd (ASX: MYR) which have brought their winter goods onto shop floors across the country.

Two years ago when Australia had a similarly warm winter, Kathmandu released a trading update advising of a subdued start to its winter sales promotion. In my opinion, it is hard to imagine things could be going much better this year.

July is the company鈥檚 third busiest month of the year, so perhaps a cold snap could help boost sales and turnaround the company鈥檚 fortunes. But for me, I would stay clear of Kathmandu for now.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. 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.

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