A big share price fall does not automatically create value. Sometimes the market is right to lose confidence. But in other cases, a sharp sell-off can leave long-term investors looking at a much better risk/reward than they had a year earlier.
The three ASX shares in this article have been hit hard over the past 12 months, falling by over 65%.
Even so, I think all three could be worth buying and holding.
Image source: Getty Images
Temple & Webster Group Ltd (ASX: TPW)
Temple & Webster is one ASX share I would consider buying after its heavy fall.
The online furniture and homewares retailer is down around 73% over the past 12 months, which tells us sentiment has turned very negative.
But I think the long-term opportunity remains attractive. Furniture is a large retail category, and I still believe more of that spending can shift online over time. Buying a sofa, bed, rug, outdoor setting, or office chair online may have felt unusual years ago, but consumers are becoming more comfortable researching, comparing, and purchasing big-ticket items digitally.
Temple & Webster is built for that world. It does not need to operate a large traditional store network, and it can offer customers a broad range of products across different styles, price points, and categories. That gives it flexibility and range that would be hard to replicate through a conventional retail footprint.
WiseTech Global Ltd (ASX: WTC)
WiseTech Global is another ASX share I would buy and hold despite its 65% decline over the past year.
I think the attraction is the role it plays inside global logistics. Moving things around the world is a tricky process. Shipments can involve freight forwarders, customs brokers, warehouses, ports, carriers, regulators, documents, and multiple countries. A lot can go wrong when information is spread across disconnected systems.
WiseTech's CargoWise platform helps customers manage more of that complexity in one place. I think that is valuable because logistics companies do not want software that only looks good in a sales demo. They need systems that help them move freight, reduce manual work, manage compliance, and keep customers informed.
The deeper software becomes in a customer's workflow, the more important it can become.
I also think global logistics will become increasingly data-driven over time. Customers want better visibility, faster execution, and more automation. WiseTech is well placed if it can keep expanding the usefulness of its platform and integrate acquisitions effectively.
The share price fall has been painful, but I think the business still has a rare global software position from an Australian base.
Gentrack Group Ltd (ASX: GTK)
Gentrack is the third ASX share I would consider buying and holding.
Its shares are down around 71% over the past 12 months, but I think the company operates in an attractive niche.
Gentrack provides software for utilities and airports. That may not sound as exciting as consumer apps or artificial intelligence, but I like the importance of the markets it serves.
Utilities are becoming more complex. Energy retailers and infrastructure operators need to manage customer accounts, billing, usage data, pricing, regulatory requirements, distributed energy, and changing consumer behaviour. Old systems can struggle as the energy market becomes more digital and decentralised.
Airports also need better technology as passenger numbers, commercial activity, and operational demands grow. Gentrack is exposed to that need for modernisation.
The appeal for me is that specialist software can become highly valuable when it solves operational problems that customers cannot ignore. If Gentrack keeps winning work and delivering for customers, I think the business could be much larger in the years ahead.
Foolish Takeaway
Shares that fall more than 65% can feel hard to buy.
But I think Temple & Webster, WiseTech, and Gentrack all have long-term opportunities that remain worth taking seriously.
One is trying to capture more of the furniture market online, another is embedded in the complex world of global logistics, and the third is helping utilities and airports modernise their technology.
They are not low-risk shares. But for investors who can be patient and accept volatility, I think these beaten-down ASX shares could be worth buying and holding.
