With the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) slipping lower by almost 3% in the last three months, I believe a number of shares on the index have fallen into bargain territory.
Three shares which I think could be classed as cheap are listed below. Here's why I think they are worth a closer look:
Greencross Limited (ASX: GXL)
This integrated pet care company's shares have taken a reasonably sharp tumble this year, leaving them trading at just 14x annualised earnings. This sell-off appears to be related to weak retail trading conditions and concerns over the impending launch of Amazon in Australia. While its retail business could be impacted by Amazon, I have been pleased to see the company combat this by shifting its focus to opening up more in store clinics to drive traffic and create cross-selling opportunities. With management buying shares on market in recent months, I believe this is a sign that it has confidence in the company's future.
Super Retail Group Ltd (ASX: SUL)
At present the shares of the company behind retail brands including Supercheap Auto and Rebel Sport are changing hands at just 13x trailing earnings. While I do have concerns over the impact that Amazon may have on its business, I have been pleased with the steps the company has taken to fight back. Furthermore, thanks to its market-leading position I believe Super Retail is better placed than its rivals to navigate the tough trading conditions.
Telstra Corporation Ltd (ASX: TLS)
Concerns over NBN margins and increased competition in the telco space have resulted in Telstra's shares shedding a significant amount of value during the last 12 months. This has left them changing hands at just 13.5x annualised earnings and providing a trailing 7.6% dividend. While there are concerns that this dividend may need to be cut in the future, I believe this risk has more than been priced into its shares now. This could make it an opportune time to snap up shares in the telco giant.
