There are some cheap ASX shares out there that are trading at great value in my opinion, partly due to the coronavirus.
With some shares it’s hard to decide if they’re trading cheaply or not because it’s hard to gauge how to price the current and future earnings. It’s much easier to see when a quality business is trading cheaply compared to their assets.
Here are two cheap ASX shares to buy today:
Brickworks Limited (ASX: BKW)
Brickworks is one of Australia’s biggest building materials businesses. It produces a variety of products including bricks, paving, roofing, precast and so on. Everyone is expecting there to be a construction slowdown later this year because of the coronavirus economic impacts. The same can be said for Brickworks’ US operations.
But when you factor in the value of Brickworks’ other assets, it makes the construction side look extremely cheap. Brickworks currently owns a large chunk of Washington H. Soul Pattinson and Co Ltd (ASX: SOL), these shares are currently valued at approximately $1.75 billion. It also has a 50% stake of an industrial property trust which is worth $710 million. The value of these two divisions together comes to around $2.45 billion, which compares to Brickworks’ current market cap of $2.05 billion.
Wouldn’t you want to buy a great building products company operating in two major markets for less than $0? That’s why I think Brickworks is a cheap ASX share.
Future Generation Global Invstmnt Co Ltd (ASX: FGG)
This is a special listed investment company (LIC). It donates 1% of its net assets each year to youth mental health charities. The LIC doesn’t change any management fees or performance fees. Future Generation Global invests in the funds of Australian fund managers that invest in overseas shares.
These fund managers are meant to be among the best in Australia. They include names like Magellan Financial Group Ltd (ASX: MFG) and Cooper Investors.
The global LIC has been a solid performer over the past three years to 30 April 2020. Its gross investment performance of 10.6% per annum outperformed the MSCI AC World Index (AUD) by 1.3% per annum. Outperformance makes a cheap ASX share even more attractive.
I think Future Generation Global is a cheap ASX share because at the end of April 2020 its pre-tax net tangible assets (NTA) per share was $1.426 per share, which is a 20% discount to today’s share price of $1.145. You wouldn’t be able to get that kind of discount by investing with the fund managers yourself.
Foolish takeaway
I think both of these ASX shares look cheap to me. Once construction starts again I think the current Brickworks share price will look very cheap. Brickworks also comes with a grossed-up dividend yield of 6%. However, Future Generation Global does offer much more diversification with international exposure. I think both shares are great, cheap buys today.
They’re not the only cheap shares out there in my opinion. I’d also love to buy these top shares:
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More reading
- 2 quality ASX shares to buy for long-term growth
- How I would build a $130,000 ASX dividend portfolio right now
- How $1,000 can be enough to change your money mindset
- 3 ASX shares that I’d invest $1,000 into EVERY month
- My 3 best ASX dividend shares to buy right now
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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