Why I think these 4 ASX shares are bargain buys for 2017

Is Vocus Communications Limited (ASX:VOC) the biggest bargain on the ASX right now? It is one of four shares I think are bargain buys ahead of the new year.

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One complaint I've heard a lot of investors make this year is that the market is expensive. In fairness, they do have a point.

At present the Australian share market trades on an average price-to-earnings ratio of 17x, well ahead of the historical average of 15x.

Low interest rates could prove to be the reason behind this premium. With rates at record lows it makes sense for savers to ditch their savings accounts in favour of the share market, driving share prices higher.

But thankfully despite the market trading on high valuations I still feel there are a number of bargain buys on the ASX right now. Here are four:

Capilano Honey Ltd (ASX: CZZ)

This leading honey producer's shares are changing hands at just 14x full year earnings. Thanks to new product launches and increasing demand from China, I expect Capilano Honey to deliver solid growth in FY 2017. At the current price this puts its shares in bargain territory as far as I'm concerned.

Flight Centre Travel Group Ltd (ASX: FLT)

With this travel agent icon's shares trading at just 12x full year earnings, I believe they are great value despite its struggles. Whilst earnings are expected to be flat in FY 2017, I believe the hard work management is doing to reduce costs in the second-half will result in a return to profit growth in FY 2018.

Tassal Group Limited (ASX: TGR)

Thanks to favourable salmon pricing in wholesale and export markets, increasing demand, and the successful integration of the De Costi Seafoods acquisition, I expect Tassal to have a strong FY 2017. So with its shares trading at 13x estimated FY 2017 and expected to pay a fully franked 4.2% dividend, Tassal could prove to be a great investment.

Vocus Communications Limited (ASX: VOC)

The Vocus sell-off this year has led to its shares trading at an estimated 10x forward earnings. This is ridiculously cheap in my opinion, especially considering that the shares of slow-growing stalwart Telstra Corporation Ltd (ASX: TLS) are priced at 15x estimated FY 2017 earnings. Another attraction is its trailing fully franked 4% dividend. Management has stated that it intends to grow it in line with the business. This could make it a real dividend star of the future for those that snap up shares at the current price.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Capilano Honey 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 Bruce Jackson.

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