10 ASX Value stocks to watch right now [2023]
If you’re a value investor, identifying undervalued shares in the stock market is crucial for your investing strategy. These 10 ASX value shares will be worth exploring if you want more exposure to great companies in the Australian stock market.
Top values shares to watch on the ASX
Company Name | Ticker | Stock Price | Year to Date | Market Capitalisation |
|---|---|---|---|---|
Fortescue Metals Group Ltd | $20.34 | -0.29% | $62.6b | |
Yancoal Australia | $5.12 | -11.11% | $35.9b | |
Qantas Airways | $5.70 | -4.04% | $9.8b | |
Whitehaven Coal | $6.37 | -27.86% | $5.3b | |
New Hope Corporation | $5.95 | 2.23% | $5b | |
JB Hi-Fi | $45.74 | 8.65% | $5b | |
Iluka Resources | $8.31 | -11.78% | $3.5b | |
Lycopodium Limited | $10.19 | 49.85% | $404m | |
Korvest Ltd | $8.26 | 5.09% | $96m | |
TPC Consolidated | $5.79 | 106.79% | $65m |
Data as of 6 September 2023. Sources: Google Finance.
*The list of stocks mentioned is ranked by market cap. When deciding what stocks to feature, we analyse the financials, recent news, the state of the industry, and whether or not they are actively traded on Stake.
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Decide which is the best Australian value stocks to add to your portfolio
1. Fortescue Metals Group Ltd ($FMG)
Market Capitalisation: $62.2b
Stock price (as of 06/09/2023): $20.34
Stake Platform Bought / Sold (1 Jan 2023 - 6 Sep 2023): 66% / 34%
Fortescue Metals Group is a major player in the Australian mining sector, primarily focused on iron ore production and in the top 3 iron ore stocks on the ASX. Their mining operations are concentrated in Western Australia's Pilbara region, one of the world's major iron ore hubs. Fortescue plays a vital role in supplying iron ore to the steel industry, with a strong emphasis on efficiency and sustainability in its mining practices.
The company's investments in renewable energy and infrastructure further enhance its competitive edge in the global iron ore market. The company currently has a ROIC of 20.79% and trades at an EV/EBITDA ratio of 4.18.
2. Yancoal Australia ($YAL)
Market Capitalisation: $35.9b
Stock price (as of 06/09/2023): $5.12
Stake Platform Bought / Sold (1 Jan 2023 - 6 Sep 2023): 69% / 30%
Yancoal is one of Australia's largest coal miners, with operations primarily in New South Wales and Queensland. The company specialises in the extraction and export of thermal and metallurgical coal, primarily serving Asian markets. Yancoal's diverse portfolio of coal assets and robust infrastructure, including rail and port facilities, enables efficient coal transport and export.
With a strong international presence, Yancoal plays a crucial role in supporting global energy and steel production. The coal miner has a ROIC of 30.17% and trades at an EV/EBITDA ratio of 1.00.
🆚 Compare these stocks YAL vs WHC→
3. Qantas Airways ($QAN)
Market Capitalisation: $9.8b
Stock price (as of 06/09/2023): $5.70
Stake Platform Bought / Sold (1 Jan 2023 - 6 Sep 2023): 60% / 40%
Qantas is Australia's largest airline, providing both domestic and international air travel services. Known for its iconic flying kangaroo logo, Qantas has a rich history in aviation. The company offers a wide range of passenger and freight services, with subsidiary brands like Jetstar Airways and QantasLink catering to various segments of the travel market.
Qantas' focus on safety, customer experience, and innovation has helped it maintain a strong position in the competitive airline industry. Its return on invested capital is 30.81% and its EV/EBITDA stands at 2.83.
4. Whitehaven Coal ($WHC)
Market Capitalisation: $5.3b
Stock price (as of 06/09/2023): $6.37
Stake Platform Bought / Sold (1 Jan 2023 - 6 Sep 2023): 65% / 35%
Whitehaven Coal is a prominent coal mining company in Australia, primarily engaged in the exploration, production, and sale of coal. They operate several mines in New South Wales, including the Maules Creek and Narrabri mines. Whitehaven focuses on both thermal and metallurgical coal, catering to domestic and international markets. The company's strong presence in the energy sector positions it as a significant supplier of thermal coal for electricity generation, particularly in Asia.
Additionally, their metallurgical coal serves the steel industry. Whitehaven's strategic location in New South Wales, a coal-rich region, enhances its competitiveness in the global coal market. The company currently has a ROIC of 54.69% and trades at an EV/EBITDA ratio of 0.71.
💡Related: Find more energy stocks listed on the ASX→
5. New Hope Corporation ($NHC)
Market Capitalisation: $5b
Stock price (as of 06/09/2023): $5.95
Stake Platform Bought / Sold (1 Jan 2023 - 6 Sep 2023): 60% / 40%
New Hope Corporation is a diversified resources company with a significant presence in coal mining, exploration, and related infrastructure development. They primarily focus on coal production, with operations in Queensland. The company has been actively involved in coal exploration and mine development, positioning itself as a key player in the Australian coal industry.
New Hope's commitment to sustainable practices and investments in port facilities adds to its long-term growth prospects in the global coal market. New Hope has a ROIC of 54.14% and trades at an EV/EBITDA ratio of 1.84.
6. JB Hi-Fi ($JBH)
Market Capitalisation: $5b
Stock price (as of 06/09/2023): $45.74
Stake Platform Bought / Sold (1 Jan 2023 - 6 Sep 2023): 68% / 32%
JB Hi-Fi is a leading Australian retailer specialising in consumer electronics, home entertainment, and appliances. With a network of physical stores and a strong online presence, JB Hi-Fi caters to tech-savvy consumers seeking a wide range of electronic products and entertainment solutions.
The company's commitment to customer service and competitive pricing has solidified its position as a trusted destination for technology enthusiasts. Its return on invested capital is 29.00% and its EV/EBITDA stands at 4.96.
7. Iluka Resources ($ILU)
Market Capitalisation: $3.5b
Stock price (as of 06/09/2023): $8.31
Stake Platform Bought / Sold (1 Jan 2023 - 6 Sep 2023): 65% / 35%
Iluka Resources specialises in the exploration, mining, and processing of mineral sands, including titanium and zirconium minerals. These minerals find applications in industries such as aerospace, ceramics, and electronics. Iluka operates mines in Australia and the United States, contributing to its status as a significant global producer of mineral sands. ILU is also featured in our list of ASX rare earth stocks to keep an eye on.
The company's commitment to sustainable practices aligns with the growing demand for environmentally responsible materials in various industrial sectors. The company currently has a ROIC of 21.39% and trades at an EV/EBITDA ratio of 4.03.
8. Lycopodium Limited ($LYL)
Market Capitalisation: $404m
Stock price (as of 06/09/2023): $10.19
Stake Platform Bought / Sold (1 Jan 2023 - 6 Sep 2023): 71% / 29%
Lycopodium is an engineering and project management company that specializes in delivering engineering design, project management, and construction support services to the mining and metallurgical industries. They play a vital role in facilitating the development of resource-related projects, contributing to the efficient and sustainable extraction and processing of minerals and metals.
Lycopodium has a ROIC of 39.30% and trades at an EV/EBITDA ratio of 5.04.
9. Korvest Ltd ($KOV)
Market Capitalisation: $96m
Stock price (as of 06/09/2023): $8.26
Stake Platform Bought / Sold (1 Jan 2023 - 6 Sep 2023): 65% / 35%
Korvest Ltd is an industrial company that provides a range of products and services, including cable and pipe support systems, access systems, and electrical solutions. These offerings serve various industries, including mining, infrastructure, and construction. Korvest's expertise lies in providing innovative solutions for clients' industrial challenges, contributing to the efficiency and safety of operations across different sectors.
Its return on invested capital is of 21.92% and its EV/EBITDA stands at 2.83.
10. TPC Consolidated ($TPC)
Market Capitalisation: $65m
Stock price (as of 06/09/2023): $5.79
Stake Platform Bought / Sold (1 Jan 2023 - 6 Sep 2023): 83% / 17%
TPC Consolidated is a telecommunications company based in Australia. The company is known for providing a range of communication services, including broadband internet and mobile phone services, to both residential and business customers. TPC has built an extensive infrastructure network, including fibre-optic lines, to offer high-speed broadband services. With a strong presence in the Australian telecommunications market, TPC Consolidated aims to meet the evolving needs of its customers in the digital age by delivering reliable and innovative communication solutions.
Its return on invested capital is of 38.61% and its EV/EBITDA stands at 1.61.
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What are the best value stocks to invest in?
Investing in value stocks involves seeking companies that are currently trading at prices lower than their intrinsic values, with the potential for long-term growth. To identify such stocks, investors should look for several key factors:
- Assess valuation metrics such as low price-to-earnings (P/E) and price-to-book (P/B) ratios relative to industry peers and historical averages. A lower P/E or P/B ratio often indicates potential value. However, it's vital to understand the reasons behind these metrics.
- Focus on strong fundamentals, including low debt levels, positive cash flows, and consistent profitability. Look for companies with a history of stable earnings growth and a competitive edge in their industry, not likely to be rocked by policy or changes in interest rates.
- Consider the industry's long-term growth prospects and evaluate the company's management team for their commitment to creating shareholder value.
- Maintain a margin of safety by buying stocks at a significant discount to their intrinsic value. Diversify your investments and exercise patience, as value investing can require time for market recognition and actual performance might be worse than growth investing in the near future.
🎓 Learn more: Want to know how to tell if a stock is undervalued or overvalued?→
What is the best-performing value stock in 2023?
The best-performing ASX value stock of 2023 is TPC Consolidated ($TPC), which saw its share price increase by over 106% year-to-date.
More resources:
✅ Are these the best long term stocks on the ASX?→
✅ List of ETFs for potential to buy and hold→
ASX value stocks FAQs
To find good value stocks, start by screening for a value metric like low price-to-earnings (P/E), book value and price-to-book (P/B) ratios compared to industry peers and historical averages.
Evaluate the company's financial health, focusing on low debt levels, consistent profitability, and cash flow. Look for firms with competitive advantages in their industry, and consider industries with favourable long-term growth prospects.
Assess the management team's commitment to shareholder value and prudent capital allocation. Ensure you're buying at a discount to intrinsic value for a margin of safety. Diversify your investments, as these companies can have a higher risk than blue chips and be patient, as value stocks may take time to realise their potential.
Investing in value stocks can be a prudent long-term strategy, as they often offer a potential for growth and can be undervalued relative to their fundamentals. However, conducting thorough research and considering your investment goals and risk tolerance before making any investment decisions is essential.
Value stocks tend to perform relatively better in a recession compared to growth stocks, as they are often viewed as more stable and less speculative. However, their performance can vary depending on the specific economic conditions and factors affecting individual companies.
This does not constitute financial product advice nor a recommendation to invest, it is for informational purposes only. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking appropriate financial or taxation advice from a licensed adviser before investing.
Megan is a markets analyst at Stake, with 7 years of experience in the world of investing and a Master’s degree in Business and Economics from The University of Sydney Business School. Megan has extensive knowledge of the UK markets, working as an analyst at ARCH Emerging Markets - a UK investment advisory platform focused on private equity. Previously she also worked as an analyst at Australian robo advisor Stockspot, where she researched ASX listed equities and helped construct the company's portfolios.
