3 ASX 200 shares that look like cheap buys to me

When I’m looking for cheap shares on the S&P/ASX 200 Index (ASX: XJO), I’m not just chasing low valuation multiples or stocks that have fallen sharply. 

What I really want are high-quality businesses where the share price has weakened more than the long-term investment case has deteriorated.

Right now, there are a few ASX 200 names where sentiment looks overly pessimistic to me. These are three that I would genuinely consider at current levels.

CSL Ltd (ASX: CSL)

CSL is one of those rare companies that almost never looks cheap, which is why the current share price stands out. The biotech stock has been under pressure as investors reacted to a cacophony of headwinds hitting at once. This includes a slower CSL Behring margin recovery, weak US influenza vaccine sales, and albumin softness in China.

However, the long-term story still looks intact to me. CSL remains dominant in its key immunoglobulins market, continues to invest heavily in capacity and R&D, and has a long history of working through short-term disruptions.

At today’s share price, market expectations are clearly very low. For a business of CSL’s quality, that is often where longer-term opportunities start to emerge for investors.

Amcor Plc (ASX: AMC)

Amcor is a stock that I think the market is overlooking. Ongoing volume weakness has weighed on the share price.

What changes the picture for me is the acquisition of Berry Global. This was a genuinely game-changing transaction, creating a global packaging leader with significantly greater scale, broader customer relationships, and improved exposure across flexible and rigid packaging markets.

Execution will matter, particularly around integration and cost synergies. But if management delivers, the combined group has the potential to generate stronger cash flows and more resilient earnings than Amcor could on its own. At current levels, I think the market is still heavily discounting that longer-term upside.

James Hardie Industries Plc (ASX: JHX)

James Hardie has been caught up in concerns about the US housing cycle, higher interest rates, slowing construction activity, and the large acquisition of Azek. That has pushed the share price down sharply.

Yet the business remains a clear leader in fibre cement products, with strong brand recognition and meaningful exposure to repair and renovation activity. Housing cycles turn, and when they do, James Hardie has historically been well placed to benefit.

If US housing conditions stabilise over time, the earnings leverage in this business could become very apparent from current levels.

Foolish Takeaway

When I look at the quality of these businesses against the expectations implied by their current share prices, all three look more attractive to me than they have in quite a while.

For patient, long-term investors, that’s often where the best opportunities begin to form.

The post 3 ASX 200 shares that look like cheap buys to me appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has positions in and has recommended Amcor Plc. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.