Should you buy these beaten down ASX shares?

The Ramsay Health Care Limited (ASX:RHC) share price is one of three that have fallen heavily this year. Should you buy them on the cheap?

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The Australian share market may have recently climbed to a 10-year high, but not all shares have been so fortunate.

The three shares below have sunk notably lower in recent times. Are they in the buy zone now?

The Hansen Technologies Limited (ASX: HSN) share price has fallen almost 25% since the turn of the year. All of this decline has come in the last few days after the billing solutions company released a bitterly disappointing trading update and accompanying earnings downgrade. When the dust settles I think that this selloff could be a good buying opportunity for investors. I’m clearly not alone in thinking this. On Tuesday non-executive director David Howell picked up 25,000 Hansen Technologies’ shares for $74,162.80 through an on-market trade.

The Ramsay Health Care Limited (ASX: RHC) share price has dropped a sizeable 28% since this time last year. The private hospital operator’s shares have come under significant selling pressure during this time after its growth slowed. The slowdown worsened recently after its normally reliable Australian operations experienced weaker growth rates in procedural work and inpatient admissions. This is likely to be down to private hospital insurance (PHI) coverage falling significantly on the back of affordability issues. While Ramsay’s shares are looking a lot better value now, I still wouldn’t be a buyer until I saw improvements in PHI coverage. Until then I fear things could continue to worsen.

The Retail Food Group Limited (ASX: RFG) share price has sunk 90% since this time year after the food and beverage company was accused of mistreating franchisees. This has led to fears that the company may struggle to sell new franchises and suffer from the non-renewal of existing franchises. In addition to this, the company recently released its profit guidance for FY 2018 that could put it in breach of its debt covenants. So whilst its shares are changing hands on extremely low multiples, I would suggest investors avoid it at all costs.

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*Returns as of May 24th 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Hansen Technologies. The Motley Fool Australia has recommended Ramsay Health Care 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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