Two of my favourite shares on the Australian market are CSL Limited (ASX: CSL) and Cochlear Limited (ASX: COH).
Whilst I think these shares ought to be considered staples in most portfolios, for some investors the lofty multiples they trade on are just too much.
But not all shares trade at a premium to the market average. In fact, the three shares below can be bought at a reasonable discount to the market average. Should you buy them?
G8 Education Ltd (ASX: GEM)
This childcare centre operator's shares are down almost 44% over the last six months amid concerns over its falling occupancy levels and the scrapping of its medium term growth targets. This has left G8 Education's shares trading at a lowly 13x estimated forward earnings. While this is undoubtedly cheap, I wouldn't be in a rush to invest. Instead, I would keep a close eye on it and wait for signs that its occupancy levels are on the rise again.
Money3 Corporation Limited (ASX: MNY)
This financial services company's shares may have hit a multi-year high today, but they still only change hands at a lowly 10x earnings. While its shares historically tend to trade on lower than average multiples, I feel a strong full-year result could lead to its shares rerating higher to a level around 12x earnings. And given the success the company is having in the secured auto loans space, I wouldn't be surprised if Money3 surprised to the upside in FY 2018.
Super Retail Group Ltd (ASX: SUL)
Super Retail is the company behind popular retail brands including Rebel, Macpac, Supercheap Auto, and BCF. At present its shares can be picked up for just 12x estimated full-year earnings, which I think offers a compelling risk/reward. Especially if the newly acquired Macpac brand reignites its Leisure segment as management hopes. Another bonus is that Super Retail's shares currently provide a trailing fully franked 5.5% dividend.
