I love looking at S&P/ASX 300 Index (ASX: XKO) shares and trying to identify opportunities that are trading at a low price.
In this article, I will discuss two businesses: one that is expanding globally and another that is trading at a low valuation, which I decided to invest in.
Many tech businesses are growing strongly, but they also have high valuations. I'm going to look at two businesses from other sectors that look like better value.
Let's dive into both of those ideas.
Premier Investments Ltd (ASX: PMV)
This business has been through changes recently after divesting most of its clothing businesses to Myer Holdings Ltd (ASX: MYR) and then distributing its Myer shares to shareholders.
Premier Investments currently owns Peter Alexander, Smiggle, and a large chunk of Breville Group Ltd (ASX: BRG) shares.
With the Premier Investments share price down more than 7% since 7 February 2025, I think the business is a compelling buy.
It's expanding its Peter Alexander store network in Australia, which is a natural boost for total sales. Even more excitingly, the business recently expanded to the UK, which is a much larger market than Australia. It started with a few stores in London last year, and there could be further growth in 2025. Over time, I think the UK could be a major profit generator for the business.
Smiggle has seen a mixed performance since the arrival of COVID-19, but it's looking to expand its store network again. It's also planning to utilise wholesale partnerships in the Middle East and Indonesia to grow its freestanding store presence in those regions.
If Peter Alexander and Smiggle can continue opening profitable stores internationally in the next few years, I believe this ASX 300 share could beat the return of the overall ASX 300 Index quite comfortably.
Elders Ltd (ASX: ELD)
This company says it works closely with primary producers (farmers) to provide products, marketing options, and specialist technical advice across rural, wholesale, agency, and financial products and services. It also has a rural and residential property agency and management network.
The chart below shows how the Elders share price has fallen around 50% since April 2022 and declined approximately 20% in the past 12 months.
Agriculture seems like a very cyclical industry to me, as most commodity sectors are. So I get excited when I see large declines in a business like Elders because its share price could be near the bottom of the cycle.
The FY24 result – released in November last year – was rough for the ASX 300 share, with revenue down 6%, underlying operating profit (EBIT) down 25%, underlying profit before tax down 37%, and statutory profit down 55%.
One of the headwinds for the business was the high interest rate, harming regional residential property demand. A recent RBA rate cut could start to help with this though.
I'm also pleased to see that the business has made acquisitions in recent years to boost its market share and strengthen its position when conditions eventually recover.
For example, it recently bought Delta Agribusiness for $475 million, which provides rural products and advisory services through a network of 68 locations, which helped fill in gaps in Elders' national presence. This is expected to add to earnings per share (EPS) in the "mid-teens" after synergies (of approximately $12 million per year) have been implemented.
I think this ASX 300 share has good potential as a contrarian buy, which is why I recently added it to my portfolio. It's trading at approximately 10x FY26's estimated earnings, according to UBS. Profit is projected to continue rising at a slow and steady pace from there.
