Here's why I think these 2 ASX shares are bargain buys right now

Telstra Corporation Ltd (ASX: TLS) is one of the 2 ASX shares I think are dirt-cheap, bargain buys on the share market today

| More on:
bargain stocks represented by one and two dollars coins in a pile

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Looking for bargain buys on the ASX? Well, you've come to the right place. With the S&P/ASX 200 Index (ASX: XJO) sitting pretty close to the post-March highs we saw last week, it isn't an easy thing to find cheap ASX shares right now. But they are out there, you just have to look, and be prepared to bet against the crowd. So, with that in mind, here are 2 ASX shares that I think are bargain buys for ASX investors today.

2 'bargain buy' ASX shares

Telstra Corporation Ltd (ASX: TLS)

Telstra is our first cheap ASX share to consider today. The Telstra share price has been down-trending for a couple of months now, ever since the company released its FY2020 earnings report back in August. Telstra shares were going for $3.39 the day before these earnings came out. The day after? $3.13. Today, the Telstra share price is just $2.85 (at the time of writing).

Why this sudden drop? Well, Telstra implied in that earnings report that its earnings wouldn't be sufficient to sustain its current 16 cents per share annual dividend in FY2021. As a telco and dividend payer, Telstra is usually sought after by income investors. As such, speculation that a dividend cut is on the cards prompted a lot of selling pressure.

But during the company's annual general meeting last week, Telstra's management appeared to walk away from contemplating a dividend cut, promising investors that, "[Telstra], if necessary is prepared to temporarily exceed our capital management framework principle of paying an ordinary dividend of 70- 90% of underlying earnings to maintain a 16c dividend."

However, since this announcement, the Telstra share price has barely budged. As such, I think this telco is a bargain buy today, especially considering a 16 cents per share dividend would give Telstra shares a fully franked, forward dividend yield of 5.61% on current pricing.

WAM Global Ltd (ASX: WGB)

WAM Global is our second bargain buy today. This company is actually a listed investment company (LIC), which means it acts more like a managed fund than a company — buying and selling shares on behalf of its investors. In WAM Global's case, the company looks for undervalued growth shares from around the world (hence the name). As of 30 September, some of its holdings include Tencent Holdings, Hasbro and Microsoft.

The reason I think WAM Global is an ASX bargain buy today is because, as an LIC, WAM Global publishes the value of its assets every month. And as of 30 September, the company reported that its assets are worth approximately $2.43 a share. That looks pretty good considering the current WAM Global share price is just $2.16 (at the time of writing). That's a 12% discount right there, which isn't a bad deal in today's market.

WAM founder Geoff Wilson clearly thinks so too. ASX records show Mr Wilson has been buying WAM Global shares hand over fist over the past few weeks. You don't often get hints like this in the investing world. As such, I think this company is also a big ASX bargain buy today

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited and WAMGLOBAL FPO. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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

A young woman sits on her bed holding a cup of coffee inside her recreational vehicle hired through the Camplify website
Cheap Shares

2 cheap ASX shares to add to your portfolio before they get expensive

I reckon this duo could see their stock prices rocket after they brush off temporary setbacks.

Read more »

A man sits in casual clothes in front of a computer amid graphic images of data superimposed on the image, as though he is engaged in IT or hacking activities.
Cheap Shares

This overlooked ASX 200 share is up 160% in a year but still dirt cheap! Should I buy it?

This tech stock is going absolutely gangbusters but many experts with long memories still consider it great value.

Read more »

A woman with black afro hair and wearing a white t-shirt shrugs and purses her lips
Cheap Shares

Are these top ASX shares dirt cheap and must-buys right now?

Is the market undervaluing these and giving you a buying opportunity?

Read more »

Couple looking at their phone surprised, symbolising a bargain buy.
Cheap Shares

2 ASX 200 shares trading at a 'deep discount to their deserved valuation'

This fund manager spies a bargain with these two stocks.

Read more »

Smiling couple looking at a phone at a bargain opportunity.
Cheap Shares

2 cheap and 'attractive' ASX shares to buy now that you've not thought of

Glenmore Asset Management's Robert Gregory is backing these 'meta' stocks for the long run.

Read more »

Two excited woman pointing out a bargain opportunity on a laptop.
Cheap Shares

3 ASX shares I think you'll be glad you bought at these prices

Here is a trio of stocks that have businesses with long and windy growth prospects. Make sure you pick them…

Read more »

Two strong women battle it out in the boxing ring.
Cheap Shares

2 'oversold' ASX shares to get onto right now at 'attractive entry levels'

If the problem is temporary, it's the perfect opportunity for long-term investors to pick up a bargain.

Read more »

A group of six young people doing the limbo on a beach, indicating oversold shares that can not go any lower.
Cheap Shares

6 oversold ASX shares to buy in February 2024

Why the price could now be right on these beaten-up ASX stocks.

Read more »