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Why I would buy these dirt cheap ASX shares

While I think that the likes of Appen Ltd (ASX: APX) and A2 Milk Company Ltd (ASX: A2M) are about fair value at their current levels, for many investors the lofty multiples their respective shares trade on are too much.

In light of this, I have picked out two shares which I think are trading a dirt cheap levels right now and well worth considering as an investment.

They are as follows:

Accent Group Ltd (ASX: AX1)

This footwear retailer’s shares may have rallied hard since the release of a solid first-half result, but they still change hands at just 14x trailing earnings. I think this is cheap given the underlying growth it has delivered so far in FY 2018. For the first-half, Accent posted underlying net profit of $26.3 million on sales of $350.3 million. This was an increase of 13% and 16.5%, respectively, on the prior corresponding period. One key highlight during the half was that online sales grew a massive 170% during the period. I think this bodes well for the company’s future given the arrival of Amazon in Australia. Another bonus with an investment in Accent is its dividend. At present its shares provide a trailing fully franked 5.3% yield.

Telstra Corporation Ltd (ASX: TLS)

Opinion is largely divided on the future of this telco giant, but I remain optimistic that it has the potential to return to growth again. Especially if the Federal Government decides to write down the value of the NBN as some brokers are predicting. This would potentially open the door to lower access prices and higher margins for providers like Telstra. As well as this, I see the potential for further margin improvement from its significant cost savings plan and the arrival of 5G internet. If the speeds delivered are as expected, then I would sooner run my home through 5G than the NBN, if data prices allow. It is worth noting that Telstra’s latest routers come with a SIM slot. This could be a potential sign of the future. So with its shares changing hands at under 13x earnings and providing a fully franked 6.4% dividend in 2018, I think it could be worth picking up shares today.

Here are three more shares which I think are great value given their current growth profiles. I would be buying them today...

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of A2 Milk and Appen Ltd. 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 Scott Phillips.

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