A difficult year can sometimes create an opportunity for long-term investors.
Several ASX shares I like have been hit hard over the past 12 months despite having plenty of growth ahead.
Here’s why I think this has created a buying opportunity.
Netwealth Group Ltd (ASX: NWL)
Netwealth shares have had a particularly difficult year and are down almost 40%.
I remain positive on the wealth management platform provider. The company continues to attract money onto its platform as financial advisers and their clients look for better technology to manage investments, superannuation, and reporting.
I think there is still a long runway here. Australia’s pool of superannuation and investment assets should continue growing over time, while Netwealth has been steadily increasing its share of the platform market.
The company is also investing in technology that could make advisers more efficient. Its proposed acquisition of Paradino adds AI-enabled workflow and automation capabilities, which I think could strengthen the platform rather than weaken its position as technology changes the industry.
So, after the share price weakness, I think investors are getting a much more attractive entry point into a business that is still growing.
Temple & Webster Group Ltd (ASX: TPW)
Online retailer Temple & Webster has also been punished by the market. Its shares are down over 80% on a 12-month basis.
I still like the long-term opportunity because online furniture and homewares remain a relatively small part of the broader Australian market.
Temple & Webster does not need to dominate the entire industry to become a much larger business. It simply needs online penetration to keep increasing while the company continues taking share.
Its online model also allows it to offer a large product range without needing the same physical store network as traditional retailers.
The business is targeting significant revenue growth over the next few years, and I think the current share price gives investors the chance to buy before that opportunity is fully reflected again.
There are risks if consumer spending remains weak, but I would be willing to look through shorter-term conditions and focus on where the business could be several years from now.
SiteMinder Ltd (ASX: SDR)
SiteMinder is another ASX share I think has become interesting after a difficult period. Its shares are down over 60% since this time last year.
The company provides technology that helps hotels manage room distribution, bookings, pricing, and their connections with online travel platforms.
I like that SiteMinder sits behind an important part of how hotels operate.
As more accommodation providers move away from manual processes, the company has an opportunity to sell them more software and automate more of the work involved in managing rooms across different sales channels.
Products such as Channels Plus and Dynamic Revenue Plus could also help SiteMinder earn more from existing hotel customers over time.
The share price may remain volatile, but I think the underlying opportunity in hotel technology is still substantial.
Foolish takeaway
A bad 12 months does not necessarily change how I feel about an ASX share.
Netwealth, Temple & Webster, and SiteMinder have all had their challenges, but I can still see clear ways for each company to be much larger in the years ahead.
At lower share prices, I think all three are worth a closer look.
The post 3 ASX shares down 40% to 80% I’d buy on the cheap appeared first on The Motley Fool Australia.
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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netwealth Group, SiteMinder, and Temple & Webster Group. The Motley Fool Australia has positions in and has recommended Netwealth Group and SiteMinder. The Motley Fool Australia has recommended Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.