If you decide to snaffle any of these cheap ASX shares, you may not even have to give up your morning coffee.
Our Motley Fool writers have come up with their favoured stocks trading for under $3 for investors looking to add to their portfolios in the new financial year.
So drink up and check out the selection below.
5 top ASX shares under $3 to buy in July (smallest to largest)
- Dusk Group Ltd (ASX: DSK), $69.74 million
- LGI Ltd (ASX: LGI), $218.97 million
- Volpara Health Technologies (ASX: VHT), $222.56 million
- Westgold Resources Ltd, (ASX: WGX), $755.43 million
- Accent Group Ltd (ASX: AX1), $930.90 million
(Market capitalisations as of market close on 6 July 2023)
Dusk Group Ltd
What it does: Dusk is an ASX retail share that specialises in candles, fragrances, diffusers, and similar homewares. It has a significant physical store network, as well as a growing online presence.
By Sebastian Bowen: Dusk is an ASX share that has been through the wars lately. Today, its share price languishes at $1.15, down more than 70% from the highs of more than $4 a share that we saw in 2021.
Sure, Dusk has experienced a bit of a sales slump since the days of lockdowns. But I think investors have punished this company harshly, with Dusk now sporting a price-to-earnings (P/E) ratio under 4 and a trailing dividend yield of more than 14%.
If the company can stabilise its sales and earnings, the current share price could prove to be laughably cheap. As such, this is definitely one cheap ASX share to check out this July.
Motley Fool contributor Sebastian Bowen owns shares of Dusk Group Ltd.
LGI Ltd
What it does: A small but profitable company, LGI specialises in providing carbon abatement solutions. The team's expertise spans the design, construction, operation, maintenance, and monitoring of biogas extraction systems. LGI operates 27 projects across Queensland, New South Wales, and Victoria.
By Mitchell Lawler: At a market capitalisation of around $220 million, LGI is still a relatively small company. However, since its founding in 2009, it has quickly established a significant presence in a niche that continues to grow in importance.
Most of LGI's customers are local governments and councils seeking to reduce landfill emissions. While that may seem like a small niche, the company estimates there are around 200 landfill sites suitable for its systems.
Over the last trailing 12-month period, LGI generated $5.8 million in net earnings from $31.7 million in revenue. In June, the company guided earnings before interest, taxes, depreciation, and amortisation (EBITDA) above its prospectus forecasts – instilling confidence in investors for more growth ahead.
Motley Fool contributor Mitchell Lawler does not own shares in LGI Ltd.
Volpara Health Technologies Ltd
What it does: Volpara is an ASX healthcare share that provides software to healthcare professionals for breast screening. It enables practitioners to analyse the images and better understand the cancer risk of individual patients, and helps to decide if any action is needed. Volpara's software can also help healthcare professionals be more efficient, which is useful during this period of staff shortages.
By Tristan Harrison: The company has two attributes that I love to see. Its gross profit margin of 92.5% is incredibly high. This means a vast majority of new revenue is turning into gross profit, which can be used to fund further growth. And revenue is growing quickly. In FY23, subscription revenue rose 35% to NZ$33.6 million.
The ASX share is already at breakeven on a cash flow basis, which I think can enable it to invest for further growth in places like Europe.
Numerous tailwinds could boost average revenue per user (ARPU) in the United States, such as mandatory density reporting in the US and the fact that more women are moving into the 'screening age', according to Volpara.
Motley Fool contributor Tristan Harrison does not own shares of Volpara Health Technologies Ltd.
Westgold Resources Ltd
What it does: Westgold Resources is a small-cap Aussie gold miner and explorer active in the Murchison region of Western Australia. It operates open pit mines, underground mines, and three processing plants in the state.
By Bernd Struben: Westgold Resources shares have rocketed 74% year to date. And I believe there's more growth potential ahead.
With global uncertainty and geopolitical turmoil unlikely to fade anytime soon, gold could hit new all-time highs in 2024.
Atop that, Westgold's Bluebird gold mine has hit a series of monthly production records. In May, Bluebird produced 6,300 ounces of gold, up 8% from April. Westgold also reported a new high-grade intercept outside the mine's current Mineral Resource footprint.
And Westgold's Great Fingall gold deposit recently saw a 49% increase in its reportable Mineral Resource Estimate (MRE). At its Q3 update, the miner reported closing cash and liquid assets of $168 million, up $9 million from the prior quarter.
Motley Fool contributor Bernd Struben does not own shares in Westgold Resources Ltd.
Accent Group Ltd
What it does: Accent is a footwear and fashion retailer with more than 800 stores and 35 online platforms across 34 brands. These include Hype DC, The Athlete's Foot, Glue Store, Platypus, and Nude Lucy.
By James Mickleboro: Due to significant share price weakness over the last three months, I think Accent would be a great ASX share to buy in July. And while trading conditions are likely to remain tough in the retail sector in the near term, I believe this is more than reflected in its share price.
For example, Bell Potter estimates that Accent will deliver earnings per share of 15.6 cents in FY 2024. This means Accent shares are trading at a lowly ~11x forward earnings, which is well below the market average.
In addition, with Accent focused on younger consumers that are less impacted by rising interest rates, I see potential for its sales to be far more resilient than other retail categories. All in all, I think this creates a compelling risk/reward for investors.
Motley Fool contributor James Mickleboro does not own shares of Accent Group Ltd.
