It's been a pretty decent start to 2025 for ASX investors. We are only a little over a month into the new year, and the ASX 200 has already leapt by 4.32%, notching up two new record highs along the way.
That's a reason to celebrate for existing investors, but what about those who are just looking to start buying ASX shares? Or seasoned investors wanting to add to their portfolios?
Well, as we covered last month, the great news is that just because the Aussie market is trading at or near record highs doesn't make now a bad time to buy.
In fact, if you take a closer look, you'll find there are many high-quality ASX shares that, for one reason or another, have been unceremoniously kicked out of the Aussie market's new-year party.
And while some of these sold-off stocks might languish in the short term for perfectly valid reasons, many can be great buys for long-term investors.
Here are five such ASX shares our Foolish writers think are going cheap right now:
5 ASX shares to snap up while they're cheap (smallest to largest)
- Rural Funds Group (ASX: RFF), $633.30 million
- Domino's Pizza Enterprises Ltd (ASX: DMP), $3.32 billion
- Endeavour Group Ltd (ASX: EDV), $7.52 billion
- Woolworths Group Ltd (ASX: WOW), $36.55 billion
- Woodside Energy Group Ltd (ASX: WDS), $46.79 billion
(Market capitalisations as of market close 7 February 2025)
Why our Fool writers think these ASX stocks are great value
Rural Funds Group
What it does: This real estate investment trust (REIT) owns a diversified portfolio of farmland across Australia, which includes almonds, macadamias, cattle, vineyards, and cropping.
By Tristan Harrison: The Rural Funds share price has fallen more than 20% in the past six months and has sunk approximately 50% from the start of 2022. While high interest rates justify some of the fall over the past three years, I believe the business has been oversold.
Rural Funds is still generating solid rental profits. In FY25, the ASX stock expects to grow its adjusted funds from operations (AFFO – rental profit) by 3.6% (despite the higher cost of debt) to 11.4 cents per unit.
I believe a company growing its underlying profits is likely to see its share price rise over time, so now could be a great time to consider Rural Funds while its valuation is so low.
The company expects to pay a distribution of 11.73 cents per unit in FY25, which currently translates into a distribution yield of 7.3%. That would be a solid return, just from the passive income alone.
With contracted rental growth in many of its leases – including annual fixed or linked-to-inflation increases – it looks like Rural Funds can continue growing its rental profit in the years ahead. I believe this justifies a higher valuation, particularly if Australian interest rates start coming down.
Motley Fool contributor Tristan Harrison owns shares of Rural Funds Group.
Domino's Pizza Enterprises Ltd
What it does: Domino's Pizza Enterprises probably needs little introduction. Australia's largest pizza chain, it also has operations in New Zealand, Asia, and Europe.
By Aaron Bell: Domino's share price reached an all-time high of more than $160.00 back in 2021. It has retreated a long way since then, falling 22.4% in the last month alone to trade at $35.93 at Friday's close.
Last November, the company announced the retirement of its CEO of 22 years, Don Meij, and the appointment of Mark van Dyck as the new CEO and managing director.
I'm anticipating a turnaround in Domino's shares following some disappointing results over the last couple of years.
Goldman Sachs agrees and is predicting growth for Domino's shares in 2025 based on a renewed focus on store unit economics and re-investment to ignite topline growth.
The broker has a buy rating on the pizza chain network and a share price target of $40.20.
An important date to watch will be when Domino's reports its FY25 first-half results on 25 February.
It looks like brighter days are ahead, and Domino's share price is trading close to its floor.
Motley Fool contributor Aaron Bell does not own shares of Domino's Pizza Enterprises Ltd.
Endeavour Group Ltd
What it does: Endeavour is Australia's largest alcohol drink retailer with more than 1,675 stores across brands, including BWS and Dan Murphy's. It also has a network of 344 hotels across the country.
By James Mickleboro: With the Endeavour share price down almost 25% since this time last year, I think a compelling buying opportunity has been created for investors.
While trading conditions are somewhat difficult right now, I believe that interest rate cuts could be a big boost to consumer spending in the category and underpin a big improvement in Endeavour's performance in 2025.
Especially given the company continues to grow both its market share in the alcohol market and vast loyalty program during these trying times. The latter now has over 4.5 million active My Dan's members. Overall, I believe this leaves Endeavour well-positioned to be a big winner when the category recovers.
Goldman Sachs believes this will be the case and thinks Endeavour shares are being undervalued by the market. This week, the broker said:
Buy on our continued belief in a high quality retailer gaining share amid a category down-cycle with a resilient growth option in Hotels. [The] company is trading at FY25 P/E of 17x vs historical average of 22x and WOW 22x, COL 21x.
The broker has a buy rating and $5.10 price target on Endeavour shares.
Motley Fool contributor James Mickleboro owns shares of Endeavour Group Ltd.
Woolworths Group Ltd
What it does: Woolworths operates the eponymous grocery and supermarket chain, the largest in Australia in terms of market share. It also owns the discount Big W network.
By Sebastian Bowen: Woolworths shares haven't been this cheap in years. The last time you would see this consumer staples giant at a share price under $30 was back in the 2020 COVID crash.
Yes, this company is currently dealing with some issues. Investors are probably bracing themselves for this month's half-year earnings report, given the costly impact of the staffing issues Woolies faced over the lucrative Christmas period, among other things.
However, I think this and other issues are temporary and do not threaten its long-term leadership of the Australian grocery sector.
As such, I believe the current Woolworths share price has been excessively oversold. In my view, the window to buy Woolies stock at a dividend yield of 2.5% (fully franked) probably won't be open for long. As such, I think Woolworths shares are worthy of a closer look for anyone looking for an oversold stock this February.
Motley Fool contributor Sebastian Bowen does not own shares of Woolworths Group Ltd.
Woodside Energy Group Ltd
What it does: Woodside is Australia's largest independent dedicated oil and gas producer. The company has a portfolio of high-quality assets in Australia, the Gulf of Mexico, the Caribbean, Senegal, the United States, and Timor-Leste.
By Bernd Struben: Though relatively flat so far in 2025, the Woodside share price is down more than 22% since this time last year.
Woodside has struggled to match the financial results we saw into mid-2023 as global energy prices retraced. Brent crude was recently trading for US$76 per barrel. But with global oil demand continuing to grow and tensions still simmering in the Middle East, I believe that's close to a longer-term floor.
The company is also one of the world's top LNG producers. With an eye on replacing coal power with a cleaner, reliable baseload electricity source, increasing global gas demand should also support the oversold stock.
In 2024, Woodside achieved a record calendar year production of 194 MMboe (million barrels of oil equivalent). And there's a lot of future growth to tap into, with Woodside's Scarborough Energy project 78% complete and its Trion project 20% complete.
And don't forget those dividends. Woodside shares trade on a fully franked trailing dividend yield of 7.8%.
Motley Fool contributor Bernd Struben does not own shares of Woodside Energy Group Ltd.
