3 beaten-down ASX shares that could be screaming bargains

I feel it is fair to say that the month of October was a big disappointment for investors. The benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) fell almost 3% last month, weighed down by drops across the board.

But that 3% drop was nothing compared to what shareholders of the following three shares had to endure. These three shares sunk like stones in October, but has this made them bargain buys?

Class Ltd (ASX: CL1)

The shares of this self-managed super fund software provider fell 13% in October. Although its shares are still on the expensive side of the market after this drop, I believe the growth it is exhibiting goes some way to justifying the premium. In the most recent quarter, Class added a further 12,030 billable portfolios onto its platform, bringing the total number of billable portfolios to an impressive 124,471.

Healthscope Ltd (ASX: HSO)

Private hospital operator Healthscope was one of the worst performers in October. Its shares fell a massive 28% last month after a trading update warned that it was experiencing weak demand for its hospitals. Management went on to say that if things do not improve as the year goes on there will be no EBITDA growth in the segment in FY 2017. At 19x full year earnings its shares are beginning to look a little more reasonable, but I would suggest waiting until there is sign of improvement.

Star Entertainment Group Ltd (ASX: SGR)

This casino operator’s share price dropped 19% in October after being caught up in an industry-wide sell off following the arrest of several Crown Resorts Ltd (ASX: CWN) employees in China. Whilst things could remain volatile until the matter is fully resolved, I feel there is a long-term investment opportunity here in Star Entertainment. I believe the tourism boom that Australia is experiencing should allow the company to grow earnings at a solid rate for at least the next few years.

If you are interested in quality dividend shares, then I would recommend this top dividend share instead. A strong yield and potential share price gains make this a great investment idea in my opinion.

Our Top Dividend Stock for Smart Investors

Our resident dividend expert names his Top Dividend Share. Not only are the shares dirt cheap, the company is trading on a fat fully franked dividend yield. Simply click here to gain access to this comprehensive FREE investment report, including the name of this fast growing ASX dividend share. No credit card required!

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Class Limited. 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.