Check out these beaten-down Brexit bargains before it's too late

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Brexit

Low-cost airline Wizz Air(LSE: WIZZ) is a relative newcomer to the stock exchange, only joining the London Main Market in March last year with an initial capitalisation of £601m. Not bad for an airline that didn't even exist prior to 2003. Investors who managed to grab a slice of the action at the IPO price of 1,150p were soon rubbing their hands with glee as they watched the value of their shares soar to 2,047p within the space of just a few months.

But of course Brexit came along and ruined the party, with the resulting collapse leaving the shares in the FTSE 250 firm close to 12-month lows around 1,500p. So should investors be wary of buying into the airline in such times of uncertainty, or should bargain hunters step in before the airline's shares take off once more?

Passenger numbers up

In its most recent trading update following the referendum, Wizz Air reported growth in profits for the first quarter of its financial year, but also pointed to weakness in its fares as a result of the fall in the value of the pound. The Central and Eastern European-focused airline said that weakness in sterling following the Brexit vote led to a weakness in fares in euro terms on routes to and from the UK.

But Wizz has a plan. The airline has started readjusting its network and halving its intended second-half growth to the UK, redeploying this capacity to other non-UK routes. Meanwhile passenger numbers are still on the up and up, with the airline reporting a 17.9% rise in its passenger numbers for last month to 2.14m, with the load factor improving from 90.9% to 91.6%.

No doubt there remains much uncertainty in the airline industry with regards to the impact of Brexit, and City analysts are expecting growth to come to a standstill this year with forecasts suggesting just a  2% lift in underlying profits to £93.1m for the year to the end of March. But things should pick up next year with profits rising above £100m and revenues surpassing £1.5bn for the first time. Wizz Air's shares are down by a quarter since the June referendum, and I believe the impact of Brexit is already baked-into the price. Trading at just eight times forecast earnings for next year, Wizz Air could be a sound long-term recovery play.

Hard Grafton

Building materials firm Grafton Group(LSE: GFTU) was another casualty of the June referendum with shares in the Dublin-based business plummeting to three-year lows following the shock result. Despite posting a rise in pre-tax profits for the first half of the year, the group warned of a challenging backdrop in UK merchanting. The mid-cap firm reported an 8% rise in pre-tax profits to £62.8m on higher revenues of £1.2bn thanks in part to strong growth in the Republic of Ireland and the Netherlands.

Growth in both revenue and earnings is expected to continue over the medium term at least, albeit at a slower pace than in recent years. With the shares trading at a much lower valuation than in recent years, I see the post-referendum slump as a buying opportunity for patient contrarians looking for a long-term recovery play in the building materials sector.

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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.