Cheap Shares on The ASX To Consider

Everyone loves a bargain, but finding genuinely cheap shares on the ASX involves more than looking for companies with low share prices or stocks trading near their 52-week lows.

A $2 stock is not necessarily cheaper than a $100 stock. What matters is the value investors are receiving for the price they pay.

Some of the best cheap shares on the ASX are established companies whose earnings, assets or future cash flows appear inexpensive relative to their current market valuations. Others have fallen out of favour because investors are concerned about a particular sector, economic cycle or company-specific problem. That creates opportunity, but also risk.

A stock can remain cheap for years if earnings deteriorate. In other cases, a temporarily unpopular company can recover as operating conditions improve, potentially giving value investors both earnings growth and a re-rating of the shares.

For this 2026 update, we have concentrated on larger, established ASX companies and looked for a combination of relatively low earnings multiples, discounts to underlying asset values, strong or improving cash generation, identifiable catalysts, and businesses with sufficient scale to withstand difficult economic conditions.

Best Cheap Shares 2026

The prices in the table above are taken from the end of July, and whilst there will be changes intraday, the charts within each stock below will be up to date each day.

Qantas Airways (ASX: QAN)

Qantas looks like the cheapest operating business in this group, with shares having sold off with rising oil prices. Any form of normalisation, or easing of tensions as we are seeing could see something of a rebound.

The valuation is the clearest attraction. QAN trades on a P/E of 9.8 and a forward P/E of 8.9, with enterprise value to EBITDA below 5. For a dominant national airline with Jetstar, Qantas Loyalty and a major domestic franchise, that is not expensive. In fact, those multiples are relatively modest for a company whose profits have remained strong.

The latest official result supports the idea that earnings are still holding up. Qantas reported 1H26 underlying profit before tax of A$1.46 billion, up 5%, operating cash flow of A$1.8 billion, and announced shareholder distributions of up to A$450 million, including a fully franked base dividend of 19.8 cents per share and an on-market buyback of up to A$150 million.

Why Qantas shares look cheap

The reason the stock still looks cheap is that airlines deserve a cyclical discount. Fuel prices, wage costs, fleet renewal, competition, regulation and customer-service issues can all hurt margins. Qantas is also capital intensive, so not all profit drops cleanly into free cash flow.

That uncertainty helps explain why Qantas can generate billions in earnings and still trade near ten times profit. There is nevertheless a credible bull case.

Qantas is replacing older aircraft with more fuel-efficient models, Jetstar continues to contribute meaningfully to the group, and the Frequent Flyer loyalty operation remains an attractive recurring-earnings business. Project Sunrise adds another potential growth avenue, with Qantas preparing ultra-long-haul services linking Australia’s east coast directly with destinations including London and New York.

Harvey Norman Holdings (ASX: HVN)

Harvey Norman shares are the most attractive income-and-value name on the list. The stock trades on a P/E of 10.7, a forward P/E of 12.1, price/book of 1.2, and a dividend yield above 6%. That combination makes HVN look cheap compared with many ASX industrials and retailers.

The business is not just a retailer. Harvey Norman has a franchise model, international exposure and a meaningful property component. That property backing is one reason the stock often appeals to value investors.

Why Harvey Norman shares look cheap

The risk is the consumer cycle. Harvey Norman is exposed to housing turnover, renovation activity, electronics demand, interest rates and household confidence. If consumers keep delaying furniture, appliance and electronics purchases, earnings can stay under pressure.

Interest rates are also important because Harvey Norman benefits indirectly from housing turnover, renovation activity and consumer confidence.

The company has another asset many pure retailers do not: a substantial portfolio of freehold property, which means investors are not simply buying a retail earnings stream but a piece of Australian franchising income. international retail, property assets, along with a dividend stream.

GPT Group (ASX: GPT)

GPT Group gives investors exposure to a diversified portfolio of Australian retail, office and logistics properties along with a growing funds-management operation. Property stocks are useful examples of why P/E alone is not enough when looking for cheap ASX shares.

GPT currently trades at around $5.03 per security, compared with reported net tangible assets of $5.53 per security at the end of 2025, representing a discount of approximately 9% to reported NTA. The means the stock trades at 0.9 times book value, with a dividend yield near 4.9%, suggesting markets are still applying a discount to listed property assets, but GPT does not look as distressed as some office-heavy REITs.

The risk is still interest rates. Property trusts remain sensitive to cap rates, debt costs, office demand and asset valuations. If bond yields stay high, REIT valuations can remain under pressure.

Why GPT shares look cheap

Listed property trusts were heavily affected when interest rates rose as higher bond yields make property income relatively less attractive and increase the cost of debt. They also push property capitalisation rates higher, potentially reducing building valuations.

The market is therefore cautious about paying full stated asset value for property companies. Despite that, retail properties continue to generate income, logistics demand remains important, office occupancy has improved, and the company’s funds-management platform provides another source of earnings.

Dexus (ASX: DXS)

Dexus shares are arguably the most obvious conventional deep-value candidate on this list.

The company owns or manages a substantial portfolio spanning office, industrial, retail, healthcare, infrastructure and other real assets.

At approximately $5.75 per security in late July, Dexus was trading well below its latest reported NTA of $8.95 per security. On the numbers, that makes it looks cheap. DXS trades on only about 0.6 times book value, with a dividend yield around 6.5%. That is a large discount and the clearest sign that the market is sceptical about the value of office-heavy real estate portfolios.

Why Dexus shares look cheap

The answer is largely office property, with the pandemic accelerating remote and hybrid working, causing investors to question the long-term value of CBD office towers. Higher interest rates then compounded the problem by reducing property valuations and raising borrowing costs.

Dexus consequently trades at a large discount because investors do not fully accept the value of the assets recorded on its balance sheet. The bull case is that the office-property panic has gone too far. If rates fall, asset values stabilise, office leasing improves and capital markets reopen, DXS could rerate from a large discount to asset backing. Dexus also reported office occupancy of approximately 92.2% and industrial occupancy of 97% at the end of 2025.

If property markets continue stabilising and interest-rate pressures eventually ease, part of the current NTA discount could close.

Santos (ASX: STO)

Santos is the least obviously cheap on trailing earnings, but it has a reasonable forward valuation and strong energy-cycle optionality.

STO trades on a forward P/E of about 12.8, price/book of about 1.1, and a dividend yield around 4.5%. That is not screamingly cheap, but it is reasonable for a major gas and LNG producer if production improves and LNG pricing remains supportive.

Santos presents a different type of value opportunity. Expectations for materially higher production mean the company’s forward P/E is approximately 9.6 times, while the shares trade at only slightly above accounting book value with a P/B ratio close to 1.1 times.

Santos’ 2026 second-quarter update said higher realised LNG pricing and expected production uplift were likely to drive free cash flow in the second half of 2026. The company also noted that first sales revenue from Pikka was expected in August, with plateau production targeted for the third quarter of 2026.

Why Santos shares look cheap

Two large projects are central to the investment case:

• Barossa, which supplies Darwin LNG; and
• Pikka Phase 1 in Alaska.

Both are moving into production and have the potential to change Santos’s future earnings and cash-flow profile. In its July 2026 quarterly update, Santos lowered full-year production guidance to 99–105 million barrels of oil equivalent after commissioning disruptions at Barossa. Second-quarter sales revenue of approximately US$1.35 billion also came in below market expectations.

Barossa was nevertheless operating at approximately 97% of planned rates by the time of the update, while Pikka had commenced continuous production. This creates the classic value-investing setup.

The market is discounting execution problems today, while the bullish case relies on the new projects generating substantially more cash tomorrow.

What does a cheap stock actually mean?

Value investing is generally associated with buying companies for less than an investor believes their underlying businesses are worth.

Benjamin Graham helped popularise this approach, while Warren Buffett later broadened it by emphasising the importance of buying strong businesses at sensible prices rather than simply purchasing the statistically cheapest companies available. The distinction matters.

A stock with a P/E ratio of five is not automatically a bargain. Its profits could be about to collapse.

Likewise, a company trading below book value is not necessarily undervalued if its assets are producing poor returns or need to be written down.

The aim is therefore not simply to find low valuation ratios but to find out why the stock is cheap, and what could cause the market to reconsider that valuation.

How to find cheap shares on the ASX

There are several common valuation measures you can use include P/E ratios, forward P/E, P/B ratio, NTA, or P/S ratio. Each one tells a slightly different story, so you will want to know how to read them.

Price-to-earnings ratio (P/E)

The P/E ratio compares a company’s share price with the earnings attributable to each share.

A P/E of 10 means investors are paying approximately $10 for every $1 of annual earnings generated by the company.

Lower P/E ratios can indicate value, but comparisons should generally be made against:

• the company’s own history;
• competing businesses;
• the broader sector;
• expected future earnings;
• and the quality and sustainability of those earnings.

Resource stocks, airlines and other cyclical businesses can sometimes appear cheapest on P/E just before profits decline.

Forward P/E

A forward P/E uses estimated future earnings rather than profits already reported.

That can be useful when a company’s earnings are changing quickly.

For example, Santos currently trades on a much higher trailing P/E than forward P/E because analysts expect earnings to increase as major growth projects ramp up.

Forecast earnings are not guaranteed, however, which means a low forward P/E should always be examined alongside the assumptions behind those forecasts.

Price-to-book ratio (P/B)

The price-to-book ratio compares the market value of a company with the value of shareholders’ equity recorded on its balance sheet.

It can be particularly useful for financial companies and asset-heavy businesses.

A P/B ratio below one means the market is valuing the company at less than its accounting book value.

That does not automatically mean investors are buying $1 of assets for less than $1. Book values can fall, assets can be impaired, and businesses can generate poor returns despite apparently strong balance sheets.

Net tangible assets (NTA)

For listed property companies, NTA can be particularly useful.

NTA attempts to measure the tangible asset backing attributable to each security.

If a property company has NTA of $9 per share but its shares trade at $6, the market is effectively applying a substantial discount to the stated value of its net assets.

That discount may represent opportunity — or signal that investors believe property values could fall further.

Price-to-sales ratio

The P/S ratio compares market capitalisation with company revenue.

This can occasionally be useful for companies with temporarily depressed earnings, but revenue by itself tells investors little about profitability.

A company generating $10 billion in sales while earning virtually no profit may deserve a lower P/S ratio than a highly profitable business.

Cash flow

Value investors should also examine operating and free cash flow.

Profits contain accounting estimates. Cash is harder to manufacture over long periods.

Companies that consistently convert earnings into free cash flow may deserve higher valuation multiples than companies whose reported profits require large amounts of capital expenditure.

Cheap shares versus value traps

The biggest danger in buying cheap shares is the value trap. A value trap is a company that appears inexpensive but remains cheap because its underlying business is deteriorating.

Warning signs can include:

• falling revenue;
• shrinking margins;
• excessive debt;
• repeated earnings downgrades;
• declining returns on capital;
• persistent equity raisings;
• structural industry disruption;
• and management consistently missing guidance.

TL;DR

The best cheap shares on the ASX are rarely companies that simply have the lowest share prices or the lowest valuation ratios. A better approach is to look for solid businesses where the market appears to be pricing in substantial bad news.

In 2026, Qantas, Harvey Norman, GPT, Dexus and Santos each fit that description in different ways. Qantas and Harvey Norman look inexpensive relative to current earnings. GPT and Dexus trade below their latest reported tangible asset backing, whilst Santos trades at a low multiple of expected future earnings as major new projects begin contributing to production.

Whether the stocks ultimately prove cheap will depend on what happens next. It’s a tricky thing predicting the future, and as we do not have a crystal ball either, the above should only be taken in conjunction with a broader overview of your personal position and goals.