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3 cheap shares at the top of my watch list

A number of shares have fallen quite sharply over recent weeks, despite the fact that their underlying business fundamentals have not changed at all.

This means now could be a great time to pick up some shares at a discounted price.

With that in mind, here are three shares that I think investors should take a closer look at:

Greencross Limited (ASX: GXL)

The Greencross share price has fallen around 10% since the start of April and is now trading at $6.60. This appears to be an attractive entry point for investors who want exposure to the growing veterinary and animal care sector, especially since the shares are now trading on just 16x earnings and offering a fully franked dividend yield of 3%. The company continues to roll-out new stores, but perhaps more importantly, it’s still delivering solid same-store-sales growth.

Bapcor Ltd (ASX: BAP)

The Bapcor share price has fallen more than 11% since the end of March and is currently trading at $5.25. The auto-parts company delivered an impressive first-half result and I think investors can look forward to more certainty now that the Hellaby’s takeover has been completed. The shares remain expensive relative to the broader market, but I think this is fair considering Bapcor is one of the best defensive shares on the ASX.

G8 Education Ltd (ASX: GEM)

The G8 Education share price has plunged around 13% since the end of March and is currently trading at $3.65. This appears to be a much fairer price to pay for a company that is being supported by the growing demand for childcare services, but one that is also facing the threat of rising staff costs and increasing competition. The current dividend yield of 6.6% is certainly attractive, but investors should also factor in the likelihood of lower earnings growth moving forward.

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Motley Fool contributor Christopher Georges has no position in any stocks mentioned. The Motley Fool Australia owns shares of Bapcor and Greencross Limited. 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 Bruce Jackson.

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