S&P/ASX 200 Index (ASX: XJO) shares are an excellent place to find bargains that could deliver market-beating returns, despite the stock market going through a recovery in the last few weeks.
The initial US tariff sell-off was rough. While some stocks have soared, such as Pro Medicus Ltd (ASX: PME) and TechnologyOne Ltd (ASX: TNE), there are other ASX 200 shares that haven't risen as far.
These are two that I still think look cheap.
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Charter Half Long WALE REIT (ASX: CLW)
This is a real estate investment trust (REIT) that owns commercial property across the country. It owns a variety of properties including hotels, government-leased offices, data centres and telecommunication exchanges, service stations, grocery and distribution facilities, food manufacturing, waste and recycling, and more.
One of the main reasons I think it still looks cheap is its net tangible assets (NTA) of $4.62 per security – the current ASX 200 share's unit price is trading at a discount of around 14% to this.
The expected interest rate cuts in 2025 could be very helpful for this REIT as it could increase the value of the properties. Rate cuts may also help lower debt costs, boosting rental profit and the distribution.
With ongoing rental growth at its properties, the business is seeing long-term growth of its underlying value.
It currently offers a FY25 distribution yield of 6.3%.
Elders Ltd (ASX: ELD)
Elders is a business that provides farmers access to products, marketing options and specialist technical advice across rural, agency and financial product and service categories. It's also a leading Australia rural and residential property agency and management network.
There are a couple of key reasons why I think this agriculturally-linked ASX 200 share looks cheap.
First of all, as the chart below shows, the Elders share price is down by close to 50% since November 2022. Its also down around 30% from September 2024. I think there's an opportunity for a longer-term rebound for a very cyclical stock.
Secondly, the broker UBS is predicting that Elders could generate earnings per share (EPS) of 62 cents in FY25. That means the business, which is larger after making recent acquisitions, is trading at less than 11x FY25's estimated earnings. I think that looks very cheap for a business expected to grow earnings each year to FY29. It's trading at just over 8x FY29's forecast profit. On top of that, it could pay a dividend yield of 5.4%, excluding any franking credits, in FY25.
