2 cheap ASX shares for value investors

Are these shares too cheap to ignore?

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With growth shares falling out of favour with investors this month, readers may be wondering what options there are out there for value investors.

With that in mind, listed below are two top ASX shares which could be candidates for the value-focused investor. They are as follows:

Adairs Ltd (ASX: ADH)

The first ASX share to look at is this leading homewares and furniture retailer. It has a presence online and offline with its core Adairs brand and its online-only Mocka brand. It has also signed an agreement to acquire Focus on Furniture for $80 million, giving it exposure to the $8.3 billion bulky furniture category.

The team at Morgans is very positive on Adairs and currently has an add rating and $4.80 price target on its shares. Its analysts are forecasting an earnings per share (EPS) compound annual growth rate of 21% between FY 2020 and FY 2024.

Despite this, the Adairs share price is trading at just 10.5x FY 2022 earnings based on Morgans’ forecast of 36 cents EPS. Furthermore, the broker estimates that its shares offer a very generous fully franked 6% dividend yield.

Inghams Group Ltd (ASX: ING)

Another ASX share for value investors to consider is this leading poultry producer. With the Inghams share price down 21% from its 52-week high, the team at Goldman Sachs believe it has created a buying opportunity. This is even after factoring in its disappointing performance in FY 2022 due to COVID headwinds.

This morning the broker retained its buy rating with a trimmed price target of $3.90. Goldman estimates that Ingham’s shares are trading at 13.5x FY 2022 earnings and offering investors a fully franked ~5% yield.

It feels this makes it great value, particularly given its strong balance sheet, relatively defensive revenue stream, and the duoploy industry structure.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended ADAIRS FPO. The Motley Fool Australia owns and has recommended ADAIRS FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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