Are these the ASX's cheapest stocks?

The market is throwing out some quality stocks that might be worth a closer look.

a woman

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Just like an episode of "Pawn Stars" or "Aussie Pickers", the local stock market is throwing out some quality stocks that have huge amounts of value — and that might be worth more than what they're given credit for.

As investors, it's our job to find bargains in the marketplace. Or in the words of Warren Buffett, to "be fearful when others are greedy, and greedy when others are fearful". This ethos could easily be applied to the Australian stock market today with these four stocks.

Given enough time, the media will find a new industry to drag down. Last time it was retail and now it's mining stocks, namely mining services stocks. One stock that has been on my radar (and now in my portfolio) for a few months is Ausdrill (ASX: ASL). A few weeks ago the stock dropped to levels not seen since the GFC and the market corrected its overcorrection by sending its share price up 42% in under a month. At a price to earnings of 3.5, it's still too cheap to pass up. Fellow Motley Fool contributor Peter Anderson summed up the company very well in this article.

Another stock that has been hammered by poor investor sentiment and even worse consumer confidence is Myer (ASX: MYR) – at least that's what some financial commentators would have us believe. However, despite low consumer confidence, the company has remained profitable for a number of years and at current prices pays a dividend over 10% fully franked. The lower Australian dollar and interest rates are supercharged tailwinds for this fashion giant, so perhaps it's worth a spot on your watchlist or in your portfolio.

It wasn't that long ago, in fact only this year, that Leighton Holdings (ASX: LEI) traded at a share price around $25.00. With past troubles on a number of chunky projects, it seems Leighton is ready to get back on to making some serious profit. Morningstar predicts that by 2015 the company's EPS will be around 205.1 cents, compared to today's P/E of only 10 and an EPS of 133.1 cents, it could have a healthy upwards trend ahead of it.

Last, and perhaps least controversial, is Mortgage Choice (ASX: MOC). Despite consumer confidence being so low, housing prices are rising and thanks to low interest rates, people are borrowing. Mortgage Choice operates with zero debt and pays a 5.6% fully franked dividend. For the second half of FY13, the company focused on a huge marketing strategy and revamped its website to allow more and more customers access to range of products. With interest rates going lower, don't be surprised if this stock starts to trend higher in the short to medium term.

Foolish takeaway

The information provided in this article is general and as any good investor knows, doing meticulous research and valuation is important before an investment decision is made. Even though you may not get it right every time, learning as much as you can about the company, its culture and products will build your knowledge base and allow you to make a better informed decision.

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Motley Fool contributor Owen Raszkiewicz owns shares in Ausdrill, Myer, Mortgage Choice and Leighton Holdings.

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