The Australian share market is in selloff mode again and heavy declines are being seen across the board.
Many of the worst performers on the market have been high PE shares such as Altium Limited (ASX: ALU), IDP Education Ltd (ASX: IEL), and Nanosonics Ltd (ASX: NAN).
While you could argue that these companies deserve to trade on such lofty multiples due to their strong long-term growth potential, that hasn't stopped investors from panic selling today.
Unfortunately, until market volatility finally eases, I suspect that high PE shares will remain vulnerable to further selling.
In light of this, now could be a good time to consider adding a few value shares to your portfolio.
Two cheap shares that I think are worth considering are listed below:
Adairs Ltd (ASX: ADH)
This home furnishings retailer's shares have fallen heavily over the last couple of months due to concerns that the housing market slowdown could impact its business. While there certainly is a risk of this, it is worth noting that this hasn't been the case thus far. Adairs recently reported strong same store sales growth and reaffirmed its FY 2019 EBIT guidance of between $47.5 million and $51.5 million. This will mean year on year growth of between 4.9% and 13.7%. Given that its shares trade at 9x earnings and offer a massive trailing fully franked 7.9% dividend, I think this makes its shares a bit of a bargain.
Westpac Banking Corp (ASX: WBC)
I think that this banking giant's shares could be a good option for value investors after its sizeable decline over the last 12 months. Westpac's shares are currently trading on multiples which are meaningfully lower than their averages over the last decade. In addition to this, they offer a trailing fully franked 7.4% dividend. While I don't necessarily expect a re-rating of its shares in the immediate term, I suspect that once the Royal Commission has finished and its final report is published, investors may start to return to the banks again.
