I think these 2 ASX shares are big bargains

Here's why these stocks could be too cheap to miss.

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The two ASX shares I'm going to cover in this article seem to be at very attractive prices that could lead to strong short-term dividends and are well-placed for good long-term returns.

There has been plenty of volatility since the start of 2022 as investors weigh up the impact of elevated inflation, high interest rates, and general economic uncertainty.

Sometimes investors can become too pessimistic about ASX shares in the short term, particularly if they don't take into account a possible recovery of earnings and improvement of the economic picture in, say, three years' time.

With that in mind, I like the look of these two ASX shares.

GQG Partners Inc (ASX: GQG)

The GQG share price has fallen 14% since 28 July 2023, making the already-cheap fund manager look even more cheap in my opinion.

When it comes to fund managers, there are a few things I like to see – a very capable investment team, long-term investment outperformance, and funds under management (FUM) inflows.

Everything I've seen of founder Rajiv Jain and the rest of the GQG investment team has been impressive. Each of the main investment strategies the company offers has achieved long-term outperformance of their respective benchmarks.

GQG recently gave its FUM update for August 2023 which showed that it had experienced net inflows of US$7.3 billion for 2023 to date, up from the $6 billion it had reported in its update for July 2023.

The ASX share has guided that it aims to pay out 90% of its distributable earnings as a dividend. Commsec suggests the company could pay a dividend per share of 15.3 cents in FY24. That implies a possible dividend yield of 10.7%.  

Those projections also imply GQG could be trading at around eight times its FY24 distributable earnings, which would be a very cheap price/earnings (P/E) ratio for a business that is growing its FUM and earnings.

MotorCycle Holdings Ltd (ASX: MTO)

This company is relatively unknown yet it claims to be the biggest player in its sector in Australia. It is a leading motorcycle dealership and accessories provider with more than 40 locations across Australia in Queensland, New South Wales, Victoria, and the ACT.

The business sells new motorbikes (all top-10 selling brands), used motorbikes, parts, and insurance. It also provides servicing and repairs.

Thanks to acquisitions, the ASX share was able to report in FY23 that its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) increased 13% and net profit after tax (NPAT) was flat at $23 million.

Motorcycle Holdings said that it will continue to consider acquisition opportunities, which is a good sign that it could increase its market share during these lean times. The ASX share is also looking to manage costs "closely" and drive "productivity improvements".

The projections on Commsec suggest it looks very cheap after its 35% fall from January 2022. It could make earnings per share (EPS) of 32.3 cents in FY24 with a possible annual dividend per share of 20 cents. That would put the forward P/E ratio at under seven and the forward grossed-up dividend yield at 13.1%.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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