Whether you're in the market for growth, income, or both, there's no denying the three words that fire up everyone's investment cortex, and that's cheap ASX shares.
The definition of 'cheap' can vary from companies with low valuation multiples relative to peers and the market to those with high dividend yields. It can even be based on the value gap between a company's current price and broker price targets.
Where to start, though? Here are two cheap ASX shares that have popped onto my radar in the past month. Each is rated favourably, with equally as favourable economic prospects ahead of them. Let's see.
Cheap ASX shares rated as buys
The first cheap ASX share in this duo is Webjet Group (ASX: WJL). Having carved out from WEB Travel Group Ltd (ASX: WEB) in September this year, shares have been choppy, down from post-listing highs of $1.09 cents.
The Webjet share price currently fetches 81 cents, up 1.2% since listing.
But despite the turbulence, analysts reckon Webjet could be a compelling option for value hunters.
Goldman Sachs rates the stock a buy with a price target of $1.10 apiece. At the time of writing, this implies a potential upside of more than 35%.
The broker was particularly impressed by Webjets's improving profit margins at its online travel agency (OTA) and the performance of its GoSee business.
Management is guiding for flat earnings growth in FY25, which Goldman deemed conservative. The broker is hinting at a potential earnings beat this year.
Jefferies also rates Webjet a buy at the same $1.10 target.
And with RBC Capital Markets also climbing aboard the buy train, that means it's three thumbs up for this cheap ASX share. Choo choo! Next stop, capital gains! (Forgive me, I'm having too much fun).
Seriously though, for those bullish on the travel sector's recovery, Webjet shares might offer an attractive entry point. With shares down 5% today since news of the ACCC proceedings against the company, the value gap for this cheap ASX share just got a lot wider.
All I want for Christmas is… Medibank
Medibank Private Ltd (ASX: MPL) shares have had their fair share of turbulence, starting many moons ago with last year's data breach.
Medibank shares were punished during 2024 but have made a swift recovery toward the end of the year, up nearly 8% in November.
This is a good sign indicating analysts believe the worst may be behind the private health insurer.
Ord Minnett rates Medibank shares a buy with a price target of $4.25 apiece. Excluding dividends, this implies an upside of 11% based on their price of $3.825 at the time of writing.
Including the broker's forecasted dividends of 17.5 cents per share in FY25, the total return could be 16% for the next 12 months.
Medibank also trades at a price-to-earnings (P/E) ratio of 21x at the time of writing, cheaper than the broad market.
Foolish takeaway
Experts say both Webjet Group and Medibank Private offer compelling opportunities for investors seeking cheap ASX shares.
Time will tell if the market has valued these businesses correctly. But based on available data, they certainly look cheap, in my view.
Medibank's stock has increased 11.8% in the last 12 months, while Webjet's shares have climbed 1.2% since the company listed in September.
