Due to sizeable falls in their respective share prices, a number of popular shares are changing hands at a significant discount to the market average of 17x earnings.
Is it time to snap up these dirt cheap shares?
Greencross Limited (ASX: GXL)
This integrated pet care company's shares have fallen 23% since the start of the year. Weak trading conditions and concerns over the impact Amazon will have on the business appear to be behind the decline. However, I believe its loyalty program and the addition of in-store clinics will help it overcome online retailers and continue its fine form. For the first 16 weeks of FY 2018 the company has reported total sales growth of 8.5% and like-for-like sales growth of 4.4% on the prior corresponding period. I think this growth means that its shares are great value at 14x trailing earnings.
Super Retail Group Ltd (ASX: SUL)
Although the arrival of Amazon in Australia will be a challenge for the company, I believe management has prepared well for the increased competition and its Supercheap Auto and Rebel Sport brands are well-placed to compete and build on their strong start to FY 2018. At present Super Retail's shares are changing hands at just 11x trailing earnings and provide a trailing fully franked 6.1% dividend.
Telstra Corporation Ltd (ASX: TLS)
While Telstra's shares could still come under a touch more pressure, I think they are close to finding a bottom now at just over 10x trailing earnings. I feel this could make it worth considering opening up a long position now, especially given its proposed 22 cents per share fully franked dividend in FY 2018. That equates to a yield of almost 6.3% based on the current share price.
