Plenty of small ASX shares have experienced volatility in 2022. Could they now be too cheap to ignore?
A business isn't necessarily better value after dropping in price. There could be a worsening of trading conditions, meaning the lower share price could be justified.
It could also be important to note that the ASX share market, or specific businesses, could keep falling from here. There isn't a rule about when a business will reach the bottom of its decline.
However, investors can only take advantage of good opportunities if they actually jump on them. Could the below two businesses be good ideas?
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Shaver Shop Group Ltd (ASX: SSG)
Shaver Shop is an ASX retail share with a market capitalisation of $138 million, according to ASX. It is a specialty retailer of male and female personal grooming products. It wants to be the market leader of "all things related to hair removal".
The company is expanding its product range into other areas like oral care, hair care, massage, air treatment, and beauty categories.
The Shaver Shop share price has fallen by more than 13% in the last month.
Despite all of the impacts from COVID-19 lockdowns, Shaver Shop achieved growth in certain financial metrics in the first half of FY22. Total sales grew by 2.8% to $127.1 million, while corporate store online sales increased by 37.2% to $51.6 million.
While the HY22 earnings per share (EPS) dropped by 9.8 to 10.6 cents, the dividend per share was increased by a large 40.6% to 4.5 cents per share.
The small ASX share thinks that it's well placed to benefit from new COVID-19 era customers turning into loyal, repeat customers. It continues to target new store openings in Australia and New Zealand.
In the second half of FY22 to 17 February 2022, total sales increased 6.2% and online sales were up 23.8%.
The broker Ord Minnett thinks that the Shaver Shop share price is a buy, with a price target of $1.30. The broker thinks the FY23 grossed-up dividend yield is going to be 13.7%.
At the time of writing, Shaver Shop shares are changing hands for $1.04 apiece.
Dusk Group Ltd (ASX: DSK)
Dusk is also an ASX retail share. It has a market capitalisation of $134 million according to the ASX.
This business describes itself as an Australian specialty retailer of home fragrance products, both through its stores and online. It sells candles, ultrasonic diffusers, reed diffusers, and essential oils, as well as fragrance-related homewares.
The Dusk share price has dropped by 32% since the beginning of 2022. It recently announced that it wasn't going ahead with the acquisition of Eroma.
While total sales went backwards in the first half of FY22 mostly due to lockdowns, there were some positive numbers. The pro forma gross profit margin increased from 67.7% in the prior corresponding period to 68% in HY22. The small ASX share also added six new stores to finish the period with a network of 128 stores.
It has a trailing grossed-up dividend yield of 13.2%.
Management sees expansion into New Zealand and a continued store rollout in Australia as opportunities.
However, the company warned that in the second half, consumer sentiment continued to be "soft".
