Should you buy these beaten down ASX shares?

It has been a bit of a disappointing start to the year for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).

As of yesterday’s close, the benchmark index had fallen almost 2% since the turn of the year.

Whilst that is disappointing, it is nothing compared to the declines that some shares have experienced so far in 2018.

Has this created a buying opportunity for the following three shares?

The BWX Ltd (ASX: BWX) share price is down 33.5% year-to-date after the release of an underwhelming half-year result. While the personal care products company delivered strong growth, it was below the market’s expectations. The good news for non-shareholders is that I think this decline has created a buying opportunity. As does Goldman Sachs which has BWX on its conviction buy list with a massive $8.25 price target.

The Domino’s Pizza Enterprises Ltd. (ASX: DMP) share price has lost around 12% of its value since the start of the year. Like BWX, this decline stems from a disappointing first-half result. Although management has held firm with its ambitious full-year guidance, heavy insider selling appears to have many investors concerned that it will fall short of expectations for a second year running. While I think that Domino’s is good value and has strong long-term growth potential, I expect things will remain volatile in the short term.

The Retail Food Group Limited (ASX: RFG) share price was one of the worst performers in 2017 and looks set to replicate this in 2018. Year-to-date the food and beverage company’s shares are down almost 54%. The negative media coverage that occurred late last year appears to have impacted the business greatly and contributed to significant store closures. Unfortunately, I can’t see how the company will be able to turn things around and would suggest investors give it a wide berth.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX Limited and Retail Food Group 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 Scott Phillips.

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