I'm about to tell you about some excellent All Ordinaries (ASX: XAO), or All Ords, ASX shares that I think are very cheap.
Certainly, there's been plenty of volatility in recent times, but this gives us an opportunity to buy shares at a (hopefully temporarily) cheaper price.
Lots of investors, analysts, and fund managers follow the largest businesses on the ASX. But I think it's more likely to find an opportunity at the relatively unknown end of the market that could be priced at a better level.
With that in mind, these are two ASX All Ords shares that look particularly good to me.
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Aeris Resources Ltd (ASX: AIS)
This is a very promising copper miner, in my opinion. The business is already producing copper and has more projects on the way. These could unlock a lot of extra earnings and cash flow in the future.
It has a market capitalisation of around $360 million, according to the ASX. At the end of the third quarter of FY23, it had $56 million of cash and receivables, around $25 million of stockpiled ore, and no debt. The balance sheet is in good shape.
In FY23, the ASX All Ords share is expecting to generate between $50 million to $70 million of earnings before interest, tax, depreciation and amortisation (EBITDA).
Aside from my belief that the copper price can improve over the long term because of higher demand due to decarbonisation, it's the low valuation that makes me believe this is extremely cheap.
Commsec numbers suggest that the business could generate 17 cents of earnings per share (EPS) in FY25, which would put it at less than three times FY25's estimated earnings. Even if it only generated 12 cents of EPS in FY25, that would put the price/earnings (p/e) ratio at less than four.
Volpara Health Technologies Ltd (ASX: VHT)
Volpara says that it makes software to help save families from cancer. The company's software helps healthcare providers better understand a patient's cancer risk and empowers patients in personal care decisions. It also guides recommendations about additional imaging, genetic testing, and other interventions.
Its software is used in more than 2,000 facilities, by more than 5,000 technologists, helping conduct more than three million cancer risk assessments each year.
The All Ords ASX share is delivering a lot of impressive numbers. In its fourth quarter of FY23, which it just announced, it achieved record cash receipts from customers of more than NZ$10 million. This was up 19% in constant foreign exchange rate terms year over year. Certainly, that growth rate is enabling the business to compound at a good rate.
Its quarterly update also showed the second straight positive net operating cash flow quarter. It's not making a lot of cash flow yet, but being cash flow positive for a fast-growing business is a handy step.
If Volpara can sell more of its software to existing clients, win over new clients, and keep growing its scale, I think its gross margin profit of over 90% will enable the business to become very profitable in the future.
