While the shares of the likes of NEXTDC Ltd (ASX: NXT) and WiseTech Global Ltd (ASX: WTC) may trade on sky high earnings multiples, not all shares on the ASX 200 index do.
Three quality ASX 200 shares that I would class as cheap right now are listed below. Here's why I think they could be in the bargain bin:
Caltex Australia Limited (ASX: CTX)
This fuel retailer's shares are currently changing hands at just 12x estimated FY 2018 earnings. Its shares have come under pressure in recent months due to the underperformance of its Lytton refinery business and the impact of high fuel prices on its Convenience business. But with fuel prices falling considerably and the company embarking on a major expansion of its convenience store network, I believe it is well-positioned to deliver a much stronger result in FY 2019. Citi agrees with this and recently placed a buy rating and $29.58 price target on its shares.
Super Retail Group Ltd (ASX: SUL)
Super Retail is the company behind the Rebel, Super Cheap Auto, and Macpac brands. Its shares have come under pressure in recent months due to general weakness in the retail sector and the surprise resignation of its CEO. With its shares trading at just 10x earnings and the company reporting solid like for likes sales growth year to date, I think the selloff has left its shares trading at a very attractive level. Another bonus is that they currently offer a very generous trailing 7.2% dividend.
Westpac Banking Corp (ASX: WBC)
Although trading conditions are not expected to improve greatly next year, I think the bank selloff has been severely overdone and put Westpac's shares firmly in the bargain bin. At present the bank's shares are changing hands at 10x earnings, 3x book value, and offer a trailing fully franked 7.9% yield. I feel this could make it worth considering an investment if you don't already have exposure to the banking sector.
