The best time to buy shares on your watchlist is when they look cheap, particularly when compared to the rest of the market.
It’s not easy to find good value shares these days. But I think the below four shares look very good value to me:
Webjet Limited (ASX: WEB)
The online travel business has seen its share price drift downwards by almost 30% since the start of May 2019.
But the FY19 result was solid in my mind with earnings per share (EPS) growing by 30% and plenty of organic growth. Most importantly, the earnings before interest, tax, depreciation and amortisation (EBITDA) margin continues to climb higher, in FY19 it was 33.6%.
WebBeds is a very attractive business and you only have to look out a couple of years to see how much the business could grow. It could cause the EBITDA margin to climb towards 50% in the future according to management.
Webjet is trading at under 13x FY21’s estimated earnings.
Duxton Water Ltd (ASX: D2O)
Duxton Water publishes its net asset value (NAV) per share every month, showing what it’s worth before tax and after tax if it were to sell all its water entitlements and pay tax on the gains.
The post-tax NAV at August 2019 was $1.62 and the pre-tax NAV was $1.81, using valuations done by the independent valuer Aither.
At the current share price of $1.34, this suggests a 17.3% discount to the post-tax NAV, which I think is a very useful margin of safety as the company looks to increase the leased percentage of its portfolio to a range of 70% to 80%.
It’s currently doing a share buyback and has a forward grossed-up dividend yield of 5.8%.
Vitalharvest Freehold Trust (ASX: VTH)
This is a farmland real estate investment trust that owns berry (blueberries, raspberries and blackberries) and citrus fruit (oranges, mandarins, lemons, avocados, grapes and ‘other’) properties
There’s a specific focus on fresh, healthy food but no exposure to animal farming, which be attractive to some investors.
When you look at the adjusted NAV of Vitalharvest of $1.04 (which includes the market value of the water), the current share price of $0.86 suggests a 17.3% discount.
The last 12 months of distributions from the trust add up to a 6.5% yield, and that’s only on 11 months of listed operation. The next 12 months could be an even bigger distribution, particularly if the variable rent returns to normal.
WAM Global Limited (ASX: WGB)
WAM Global looks to use the same winning investment strategy that has helped WAM Capital Limited (ASX: WAM) do so well, but on a global stage.
It has outperformed its global benchmark during FY20 and has plenty of global growth names in the portfolio like American Express, Diageo, CME Group and Booking.
Despite the solid performance and the start of dividend payments to shareholders, it was trading at a 14.8% discount to its NTA on 12 September. The share price is worth buying in my opinion with outperformance after fees and a good discount to the NTA.
At the current share prices I’m most drawn to Webjet and Vitalharvest. I’m not sure how often you will get the opportunity to buy assets like these at low prices with both of them offering good returns potential.
Where to invest $1,000 right now
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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
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Motley Fool contributor Tristan Harrison owns shares of DUXTON FPO, Vitalharvest Freehold Trust, and WAMGLOBAL FPO. The Motley Fool Australia has recommended DUXTON FPO and Webjet 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.