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Are these beaten down ASX shares in the bargain bin?

The Australian share market has been on a stellar run of late and broke through the 6,300 points mark on Monday for the first time in over a decade. Unfortunately, not all shares have been able to follow the market higher.

Three shares which have come under heavy selling pressure over the last 12 months are listed below. Are they in the bargain bin?

The Ainsworth Game Technology Limited (ASX: AGI) share price has shed almost 53% of its value since this time last year. Shareholders have rushed to the exits in their droves after the gaming technology company released a shockingly bad trading update in May. That update revealed that the company’s sales had been adversely affected by factors including competitive activity, regulatory approval delays in product submissions, and delays to scheduled key game releases until the first-half of FY 2019. Because of this, full-year net profit before tax is expected to come in 37% lower than in FY 2017. Quite the opposite of rival Aristocrat Leisure Limited (ASX: ALL) which has been smashing expectations this year. I know which one I would prefer to be invested in.

The Catapult Group International Ltd (ASX: CAT) share price has fallen a sizeable 43% over the last 12 months. High levels of insider selling at the start of the year, increasing costs, and a sizeable capital raising have all weighed heavily on the performance of its share price. While the worst is arguably behind it now and the company should not need to raise capital again, I intend to wait and see how its financial performance improves over the next 12 months before investing. I’d class it as one for the watchlist.

The Retail Food Group Limited (ASX: RFG) share price has lost a staggering 90% of its value during the last 12 months. The master franchisor of a number of food retail brands has been negatively impacted by media reports alleging the mistreatment of franchisees. This appears to have many in the market, myself included, worried that Retail Food Group could struggle to sell new franchises and suffer from low renewals. Asides from the bad press, I think the company’s brands are tired and need major investment. But given its fall from grace, it seems unlikely that this will be possible without massive shareholder dilution. It shares may look dirt cheap, but I would stay well away.

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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 Catapult Group International Ltd. 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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