2 ASX shares I think are cheap today

The A2 Milk Company Ltd (ASX :A2M) is one of the 2 ASX shares that I think are selling cheap today and are worthy of a long-term investment.

| More on:
cheap shares represented by hand crossing out the 'un' in 'unaffordable' using red marker

Image source: Getty Images

When it comes to buying ‘cheap’ ASX shares, valuation is often in the eye of the beholder. It was pretty easy to call CSL Limited (ASX: CSL) overvalued at most points over the past decade. Yet buying it at any time before 2020 turned out to be a pretty good idea. It’s a story often repeated, most famously with the US technology titan Amazon.com Inc. (NASDAQ: AMZN), which even today trades at a price-to-earnings (P/E) ratio of 118.

But that problem isn’t one afflicting the ASX shares named below. Here are two ASX shares that I think are cheap and undervalued today. Now, as with most ‘cheap’ shares, the two companies named below are trading at relatively low valuations for a reason. However, I think both are still worthy of consideration today.

2 ASX shares selling cheap today

Virgin Money UK (ASX: VUK)

Virgin Money UK is my first cheap ASX share today. It’s a United Kingdom-based bank, formerly known as Clydesdale Bank, that was spun-out of National Australia Bank Ltd (ASX: NAB) a few years ago. Since then, the company’s share price hasn’t been a nice thing to watch. It last peaked at $6.21 back in July 2018, but has trended lower ever since. Like most bank shares, the coronavirus outbreak has been devastating for the Virgin Money share price, which is languishing at $1.30 at the time of writing after falling another 2.8% today.

But I think this bank’s share price is so cheap now that it’s worthy of a good hard look. Yes, the UK’s economy is being hit very hard at the moment. A second wave of coronavirus infections is unfortunately sweeping through the country and, as such, UK bank shares like Virgin Money are being put through the wringer. But I think Virgin Money is well-poised for a strong recovery once the country opens back up. Like in Australia, the UK banking sector does enjoy strong support from the government, so I think there is very little risk of this company hitting the wall. It could make a good turnaround play at its current prices.

A2 Milk Company Ltd (ASX: A2M)

a2 Milk is my second cheap share to consider today. The company is being hit hard today, with the a2 Milk share price down almost 11% to $15.37 in Monday’s trade (at the time of writing). The catalyst for this hefty move? This morning a2 Milk told the markets that, due to disruption to daigou reseller channels, the company is now expecting revenues to decline year on year for the first half of FY2021 by between 3.9% and 10.1%.

Whilst this is obviously not good news for a2 Milk, I think it will prove to be a temporary setback. This company has been one of the most phenomenal ASX success stories over the past decade. The a2 Milk share price has rewarded shareholders with more than 2,200% in gains over the past five years. With its powerful brand and successful management team, I think this pullback is a great buying opportunity for a long-term investment in a2 Milk today.

These 3 stocks could be the next big movers in 2021

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

*Returns as of 15/2/2021

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Amazon. 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.

More on Cheap Shares

Woman on her laptop thinking to herself.
Retail Shares

Are these 2 small ASX shares too cheap to ignore?

Some cheap ASX shares could offer opportunities. Let's take a look.

Read more »

Two kids are selling big ideas from a lemonade stand on the side of the road for cheap!
Cheap Shares

2 cheap ASX shares to buy right now: experts

JB Hi-Fi and Accent are two ASX shares with low valuations.

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Cheap Shares

2 ASX shares at ‘appealing’ buy prices right now

Stock markets have been in turmoil this year, especially the past month. Here are a couple of bargains worth considering.

Read more »

cheap stocks represented by open brief case with golden light shining from it
Cheap Shares

2 cheap ASX shares to buy in May: Experts

Adairs and Best Buy are two ASX shares that have low p/e ratios, which experts rate as buys.

Read more »

three young children weariing business suits, helmets and old fashioned aviator goggles wear aeroplane wings on their backs and jump with one arm outstretched into the air in an arid, sandy landscape.
Broker Notes

48% fall: Fund names 3 ASX shares to take off after heavy crash

Many non-mining stocks have been hammered this year, but that could mean there are some bargains waiting to skyrocket.

Read more »

two dogs, a golden one and a black one, together carry a stick in their mouths as the run side by side with contented, happy looks on their faces.
Broker Notes

2 ASX shares that were dogs last month but good to buy now: expert

The team at Celeste Funds Management is keeping the faith in this pair of stocks despite their horrible underperformance in…

Read more »

two smiling people, a man and a woman, raise a hand in a wave as they are tethered to each other while they skydive against a clear sky with a covering of clouds below before their parachute opens.
Broker Notes

It’s time to buy these 2 fallen ASX shares again: expert

One professional has named a pair of beaten-down stocks he that thinks is ready for a massive rebound.

Read more »

A older man and younger man rest, exhausted but happy after a good boxing session.
Growth Shares

Is it time to buy these 2 beaten-up ASX shares in April 2022?

These two ASX shares have dropped heavily, so, are they opportunities?

Read more »