As we approach the end of the year, investors are on the lookout for great-value opportunities to cap off 2023 on a high note. The Australian share market has experienced considerable volatility throughout the year, presenting potential bargains among quality companies whose share prices may not accurately reflect their intrinsic value. Here, we explore five cheap ASX shares that our Motley Fool writers believe offer excellent value as we head into December.
What it does: CSL is a global biotechnology company focused on developing and delivering innovative medicines for life-threatening medical conditions.
Why it's a bargain: CSL shares have experienced an unusual dip in 2023, down 15% for the year. Despite recent rebounds, the current price presents an attractive opportunity to invest in one of Australia's highest-quality companies. Goldman Sachs foresees CSL entering a period of more capital-efficient growth, with a forecasted earnings per share compound annual growth rate of 14% between FY 2023 and FY 2027.
What it does: Johns Lyng is a building services group that specializes in building and restoration services across Australia, the United States, and New Zealand.
Why it's a bargain: Despite a 36% decline in its share price since April 2022, Johns Lyng is experiencing robust growth. In FY23, net profit after tax (NPAT) increased by 41%, and dividends rose by 58%. The company expects further growth in FY24, driven by both core operational expansion and increased catastrophe work contracts.
What it does: Santos is a global oil and gas company with operations in Australia, Papua New Guinea, Timor-Leste, and the US.
Why it's a bargain: The Santos share price has fallen by 9% since October 20, mainly due to a retrace in energy prices. With the International Energy Agency forecasting increased global oil demand in 2024 and OPEC+ committed to output restrictions through Q1 2024, Santos shares may rebound alongside rising oil prices.
What it does: Telstra is Australia's largest telecommunications company, providing various communication services such as fixed-line internet and mobile telephony.
Why it's a bargain: Telstra has seen double-digit declines in its share price in the latter half of 2023, possibly due to diminished investor interest after abandoning plans to divest valuable infrastructure assets. However, with a fully-franked dividend yield over 4.4%, Telstra remains a defensive share with a strong market position.
What it does: RPMGlobal provides technology and consulting services to mining companies, with a significant portion of its revenue derived from software services.
Why it's a bargain: As a service provider in the cyclical mining industry, RPMGlobal offers proxy exposure with less volatility than direct commodity investments. Despite the industry's fickle nature, RPMGlobal's share price has dipped approximately 9% since its July peak, presenting a potential buying opportunity.
In conclusion, as we navigate the final stretch of 2023, these cheap ASX shares offer potential bargains for investors seeking value in quality companies. It's essential to conduct thorough research and consider the unique factors influencing each stock before making investment decisions.