It can be quite difficult to find ASX shares at cheap prices that aren't value traps.
When a business looks cheap, it's probably cheap for a reason. But there are businesses out there that could be too cheap for the underlying growth that they may produce over the next few years.
With that in mind, I think these ASX shares are now trading at crazy cheap prices:
Citadel Group Ltd (ASX: CGL)
I think Citadel is cheap because it's trading at 15x FY22's estimated earnings at the current Citadel share price.
The ASX software share is the market leader in healthcare software for pathology and cancer care in Australia. After the acquisition of UK business Wellbeing it is the leader in healthcare software in the UK for radiology and maternity. Management believe there are significant cross-selling opportunities with an estimated market opportunity of $250 million to $350 million of total contract value revenue in tenders over the next two to three years.
The current business is strong with a (pro forma) gross profit margin of 65.3% and (pro forma) recurring revenue being 77% of total revenue. It's a defensive business with limited impact from COVID-19.
I believe the Wellbeing acquisition is transformative for Citadel. It opens up more growth opportunities, but it also increases the quality of the earnings in my opinion.
It could acquire more bolt-on acquisitions that make sense over time, diversifying the ASX share's earnings further.
Vitalharvest Freehold Trust (ASX: VTH)
I think Vitalharvest is cheap because it's trading at a 17% discount to the net asset value (NAV) at 30 June 2020.
It's an agricultural real estate investment trust (REIT). It owns large berry and citrus farms which are leased to Costa Group Holdings Ltd (ASX: CGC), the biggest Australian horticultural company.
The ASX share receives fixed rent and variable rent from Costa. The variable rent is a 25% share of the profit of the farms that Costa rents. The drought and other issues were a big drain on profit in FY20, but it seems that is about to get better with the drought conditions improving.
New manager Primewest Group Ltd (ASX: PWG) is looking to acquire new properties that will pay more consistent rent. Properties used for food processing, storage and logistics could be more reliable. More predictable rent could be good for the Vitalharvest share price and the distribution.
The ASX share has a trailing distribution yield of 6.3%. However, I think the distribution will recover in FY21 as conditions improve.
PM Capital Global Opportunities Fund Ltd (ASX: PGF)
I think PM Capital Global Opportunities Fund is cheap because it's trading at a 21% discount to the pre-tax net tangible assets (NTA) per share at 28 August 2020.
The listed investment company (LIC) looks to invest in global businesses that it thinks are long-term opportunities.
It owns quite a diverse portfolio of businesses. Some of the ones it owns include homebuilder Cairn Homes, Bank of America, Visa, casino business MGM China Holdings, alternative asset manager KKR & Co, Siemens and copper miner Freeport-McMoRan.
Many of the holdings that it owns could rebound strongly when the global economy recovers from COVID-19 impacts.
I like that the ASX share has almost a third of its portfolio invested in European shares, which provides attractive diversification.
The LIC recently launched a share buyback and it also increased its dividend by 25% to 2.5 cents per share. At the current PM Capital Global Opportunities Fund share price it has a grossed-up dividend yield of 6.8%. That's a solid yield in the current low interest environment.
Foolish takeaway
Each of these ASX shares look attractively cheap to me. I think they could all beat the ASX over the next few years. I think Citadel will produce the biggest returns over the next few years because of its international growth and high margins. However, the other two look like good options for income investors.
