With the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) trading on a price-to-earnings of approximately 16.2x, finding value in the market is becoming harder and harder.
But if you look close enough you will find that there are still a few potential bargain buys out there.
Two which I think investors ought to consider today are listed below. Here's why I like them:
Accent Group Ltd (ASX: AX1)
The shares of this footwear retailer, formerly known as RCG Corporation, are currently changing hands at a lowly 12x trailing earnings. Although Accent's bottom line growth is expected to slow in FY 2018, management does still expect another year of profit growth.
Which at this multiple arguably makes its shares dirt cheap in my opinion. Especially given that they provide investors with a trailing 6.6% dividend at the current share price. One thing that I do like about Accent is the strength of its licensed brands. This should offer the company some protection from the arrival of Amazon in Australia.
Collins Foods Ltd (ASX: CKF)
This KFC operator's shares have been on a bit of a slide in recent months following a weaker-than-expected half-year result. But considering the strong growth potential the company has from its expansion into an underpenetrated European market, I think investors ought to overlook this minor blip and focus on the bigger picture.
Although its shares don't necessarily look that cheap on paper at 18x trailing earnings, if you adjust for one-offs from its first-half result then its shares are priced at under 15x earnings. I think at this price it becomes an attractive buy and hold investment option and a far cheaper alternative to industry peer Domino's Pizza Enterprises Ltd (ASX: DMP).
