While there are a lot of ASX shares trading on sky high earnings multiples at the moment, luckily for investors there are also a number of shares which I think are ridiculously cheap and ready for an investment.
Three such shares are listed below. Here's why I think they are buys today:
The Mantra Group Ltd (ASX: MTR) share price is trading 34% lower than it was 12 months ago, largely as a result of concerns over its CBD accommodation portfolio. While the rest of the business has been booming, demand for CBD rooms has fallen. This is possibly due to an oversupply of hotel rooms and the sudden emergence of Airbnb. But with Australian inbound tourism growing strongly and management working hard to rectify the issue, I expect to see Mantra's CBD portfolio recover strongly in 2018. At just 16x estimated full-year earnings and paying a fully franked trailing 3.7% dividend, I think Mantra would be a great buy and hold investment.
The Mayne Pharma Group Ltd (ASX: MYX) share price has fallen 27.5% in the last six months, meaning its shares are changing hands at just 14x annualised earnings. While there are concerns over price-fixing allegations, management has advised that any penalties imposed would be immaterial. I believe its dirt cheap share price and the exceptional growth potential of its lucrative pipeline of generic drugs provides investors with a compelling risk/reward.
The Vocus Group Ltd (ASX: VOC) share price has dropped a whopping 61% in the last 12 months largely due to a boardroom spat and concerns over NBN margins. This has left its shares trading at a lowly 13x trailing earnings. Whilst there is still a lot of uncertainty over the impact the NBN will have on its profitability, I have been very impressed at the way Vocus has continued to win market share. Like Mayne Pharma, I believe an investment in Vocus provides investors with a compelling risk/reward as well.
