Here's how I'd invest $2,000 in ASX value shares right now

I'm going to talk about three different ideas that could be great value.

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Key points

  • Bailador is a tech investment fund that is valued at a large discount to its assets
  • Shaver Shop is trading on a forward price/earnings (P/E) ratio of less than 10
  • Johns Lyng is expanding into adjacent categories which could become big earners for the company 

ASX value shares can mean different things to different people. However we define it, I think there are opportunities to be found on the ASX share market.

For some investors, a value ASX share could be one that's trading at a large discount to its price-to-book (P/B) ratio. There are also ones that have a low price/earnings (P/E) ratio. In addition, a heavily sold-off stock could count as a value ASX share as well.

Hence, in this article, I'll name one ASX share for each type of value share mentioned above if I were going to invest $2,000.

Price-to-book ratio

Bailador Technology Investments Ltd (ASX: BTI) is a tech investment business that owns a relatively concentrated portfolio of stakes. When it first invests in a business, that investment is unlisted, but two of its investments have since become listed: Siteminder Ltd (ASX: SDR) and Straker Translations Ltd (ASX: STG).

The investment team at Bailador look for tech businesses that have attractive unit economics, international revenue generation, a huge market opportunity and the ability to generate repeat revenue.

Two of its investments were recently sold for good prices – InstantScripts and Rezdy. It's currently looking for more opportunities to invest in.

At the current Bailador share price, the ASX value share is trading at a 22% discount to the pre-tax net tangible assets (NTA) at the end of June 2023.

Low P/E ratio ASX value share

Shaver Shop Group Ltd (ASX: SSG) is one of the leading retailers of hair removal and grooming in Australia, which is a useful position to be in. Even if there's a recession, I'd guess that people are still going to want to keep control of their hair.

I think this business is relatively defensive, with the business demonstrating an impressive record of growing its dividend each year since 2017.

It could continue to achieve decent results if it keeps expanding its total store numbers and sells more products from different categories, such as oral care.

According to estimates on Commsec, the value ASX share is trading at under 9 times FY24's estimated earnings with a possible FY24 grossed-up dividend yield of 14.5%.

Sold-off ASX value share

Johns Lyng Group Ltd (ASX: JLG) is a business that specialises in repairing and restoring buildings in Australia and the US after insurable events, such as damaging storms and fires.

The Johns Lyng share price has fallen 22% since mid-May and it's down over 40% from April 2022. This has happened despite the company's ongoing impressive growth of core earnings before interest, tax, depreciation and amortisation (EBITDA).

I believe that not only will core earnings continue to grow due to there seeming to be more storms that are expensive to fix, but Johns Lyng is expanding into adjacent categories which could become big earners for the company and it could achieve strong synergies, such as the strata management segment.

It's now valued at 24 times FY24's estimated earnings according to Commsec, following the sell-down of the Johns Lyng share price.

Motley Fool contributor Tristan Harrison has positions in Bailador Technology Investments. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Bailador Technology Investments, Johns Lyng Group, and SiteMinder. The Motley Fool Australia has positions in and has recommended SiteMinder. The Motley Fool Australia has recommended Bailador Technology Investments, Johns Lyng Group, and Straker Translations. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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