2 cheap, quality ASX companies to buy today

Not only are these two companies high quality, they are also cheap!

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As a value investor, I believe that while the market is currently not cheap, there are some quality ASX companies that are trading below my estimated fair value. The two companies outlined below are both quality companies and cheap at current prices.

1. McMillan Shakespeare Limited (ASX: MMS)

Leading salary packaging and novated leasing provider, McMillan Shakespeare has seen its share price fall from over $15 to a low of $6.70 over the past 12 months. The fall in share price was the result of the previous government announcing that it proposed to remove the concessional Fringe Benefits Tax (FBT) treatment in relation to motor vehicles. However, the current government subsequently decided not to proceed with the proposed changes to the FBT law, and recent government commentary indicates that there will be no material changes to the FBT law which will impact McMillan Shakespeare's business.

McMillan has indicated that it has been "business as usual" following the reversal of the proposed laws and that it is experiencing strong growth in its key novated leasing and salary packaging divisions. Analysts at Morningstar have forecast that the company will increase earnings by 35% in FY15. McMillan also sees a huge opportunity to expand in the UK. With the shares trading on a price earnings ratio of just 13 times FY13 earnings and paying an attractive dividend yield of 4.5%, the shares look very cheap.

2. CSL Limited (ASX: CSL)

CSL is one of the highest quality companies on the ASX. Over the past decade, the share price has increased by a staggering 800%, making it one of the best-performing stocks of the last decade. However, the party is far from over.

CSL is one of the world's leading blood plasma manufacturers. The size and scale of CSL's operations provide it with a significant economic moat and make it difficult for competitors to enter the industry. Further, CSL has a wonderful history of innovation which will continue to drive future profits. Ageing populations in developed countries, along with the growing expenditure on healthcare in emerging economies should result in high industry growth rates over the next decade which will see CSL's earnings also increase strongly.

CSL management is also shareholder friendly. The company is currently embarking on a huge share buyback program which indicates management are of the view that the shares are currently undervalued. CSL is a defensive growth stock and the current price of $67 represents good value for such a high-quality company set to grow earnings over the long term.

Motley Fool contributor Bradley Murphy owns shares in CSL mentioned in this article. 

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