2 ASX shares I think are cheap today

The A2 Milk Company Ltd (ASX :A2M) is one of the 2 ASX shares that I think are selling cheap today and are worthy of a long-term investment.

| More on:
cheap shares represented by hand crossing out the 'un' in 'unaffordable' using red marker

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

When it comes to buying 'cheap' ASX shares, valuation is often in the eye of the beholder. It was pretty easy to call CSL Limited (ASX: CSL) overvalued at most points over the past decade. Yet buying it at any time before 2020 turned out to be a pretty good idea. It's a story often repeated, most famously with the US technology titan Amazon.com Inc. (NASDAQ: AMZN), which even today trades at a price-to-earnings (P/E) ratio of 118.

But that problem isn't one afflicting the ASX shares named below. Here are two ASX shares that I think are cheap and undervalued today. Now, as with most 'cheap' shares, the two companies named below are trading at relatively low valuations for a reason. However, I think both are still worthy of consideration today.

2 ASX shares selling cheap today

Virgin Money UK (ASX: VUK)

Virgin Money UK is my first cheap ASX share today. It's a United Kingdom-based bank, formerly known as Clydesdale Bank, that was spun-out of National Australia Bank Ltd (ASX: NAB) a few years ago. Since then, the company's share price hasn't been a nice thing to watch. It last peaked at $6.21 back in July 2018, but has trended lower ever since. Like most bank shares, the coronavirus outbreak has been devastating for the Virgin Money share price, which is languishing at $1.30 at the time of writing after falling another 2.8% today.

But I think this bank's share price is so cheap now that it's worthy of a good hard look. Yes, the UK's economy is being hit very hard at the moment. A second wave of coronavirus infections is unfortunately sweeping through the country and, as such, UK bank shares like Virgin Money are being put through the wringer. But I think Virgin Money is well-poised for a strong recovery once the country opens back up. Like in Australia, the UK banking sector does enjoy strong support from the government, so I think there is very little risk of this company hitting the wall. It could make a good turnaround play at its current prices.

A2 Milk Company Ltd (ASX: A2M)

a2 Milk is my second cheap share to consider today. The company is being hit hard today, with the a2 Milk share price down almost 11% to $15.37 in Monday's trade (at the time of writing). The catalyst for this hefty move? This morning a2 Milk told the markets that, due to disruption to daigou reseller channels, the company is now expecting revenues to decline year on year for the first half of FY2021 by between 3.9% and 10.1%.

Whilst this is obviously not good news for a2 Milk, I think it will prove to be a temporary setback. This company has been one of the most phenomenal ASX success stories over the past decade. The a2 Milk share price has rewarded shareholders with more than 2,200% in gains over the past five years. With its powerful brand and successful management team, I think this pullback is a great buying opportunity for a long-term investment in a2 Milk today.

Should you invest $1,000 in Australian Finance Group Limited right now?

Before you buy Australian Finance Group Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Australian Finance Group Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 6 March 2025

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Amazon. 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 Scott Phillips.

More on Cheap Shares

Smiling couple looking at a phone at a bargain opportunity.
Cheap Shares

A leading fund manager is excited by these 2 undervalued ASX shares

Here’s why investors can feel bullish about these stocks.

Read more »

Broker looking at the share price on her laptop with green and red points in the background.
Cheap Shares

Leading fund manager bullish on these 2 exciting ASX 200 shares

These buy-rated stocks have a compelling future.

Read more »

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Cheap Shares

These cheap ASX 200 shares could rise 30% to 35%

Analysts have good things to say about these beaten down shares.

Read more »

A young woman drinking coffee in a cafe smiles as she checks her phone.
Cheap Shares

The 2 best ASX shares to buy before they recover

Goldman Sachs has put buy ratings on these beaten down stocks.

Read more »

Smiling couple looking at a phone at a bargain opportunity.
Cheap Shares

I think these 2 cheap ASX shares are buys for value investors

These stocks look attractively cheap. Here’s why.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Cheap Shares

Buying AFIC shares? Here's what you actually own

AFIC shares are currently trading well below their value.

Read more »

A woman looking at her watch representing need to buy ASX shares urgently.
Cheap Shares

Is this the last chance to grab these cheap ASX shares at a discount?

These buy-rated shares may not be cheap for long according to analysts.

Read more »

Smiling couple looking at a phone at a bargain opportunity.
Cheap Shares

Where to find the 'cheapest' shares on the ASX

Where should investors look for opportunities right now?

Read more »