Investors may feel like they have missed a significant buying opportunity with both the S&P/ASX 200 Index (ASX: XJO) and All Ordinaries (ASX: XAO) bouncing back more than 30% since their March lows. While the market may continue to crawl higher, here are two ASX shares that I feel have remained dirt cheap.
2 ASX shares that are still dirt cheap
1. Money3 Corporation Limited (ASX: MNY)
Money3 provides automotive finance for the purchase and maintenance of vehicles in Australia and New Zealand. The company estimates that 1 in every 500 vehicles in Australia and 1 in every 800 vehicles in New Zealand have current Money3 loans. Despite the economic uncertainty amidst COVID-19, the company highlighted in late April that its cash collections over Easter were superior to the prior corresponding period (PCP) and had not been materially impacted by the pandemic to date.
Money3 believes that it is well positioned to be patient and opportunistic in M&A activity or originating new organic growth when demand returns to pre-pandemic levels. In Australia, government stimulus will have a positive impact on its customers' ability to continue paying their loans, while new loan originations are continuing to customers with income. The company's New Zealand business believes that demand for automotive finance will return as restrictions are lifted.
In its YTD March 2020 unaudited financial results, Money3 saw revenues increase 44.4% on the PCP while normalised NPAT increased 49.2%. A 5 cent dividend was paid out following strong earnings, representing a dividend yield of approximately 5.90%. The Money3 share price trades at a relatively low price-to-earnings (P/E) ratio of just 10.4. Given its growth potential and market leading dividend, I believe Money3 is one of the cheapest ASX shares out there.
2. Bell Financial Group Ltd (ASX: BFG)
Bell Financial Group is an Australian-based provider of stockbroking, investments and financial advisory services to private, institutional and corporate clients. On 10 July, the company advised that it expects to report a first half 2020 profit before tax of approximately $23.5m, an increase of around 5% on the PCP. The key drivers of growth were its subsidiaries, Bell Potter Capital and Third Party Platform, delivering 120% and 140% respective increases in unaudited profit before tax ($2.4 million and $3.3 million respectively).
I believe Bell Financial's services will continue to be highly sought after despite challenging economic conditions. Demand may be driven by factors such as increased trading volumes from all types of investors, companies requiring additional capital/capital raisings and access to financial advisory services for things such as potential M&A activity. Much like Money3, the Bell Financial Group share price trades at a P/E of just 12.08 while paying a dividend yield of approximately 6.5%.
