Low P/E and high conviction: are these 5 ASX stocks bargains?

It’s anyone’s guess as to what might happen in markets, or the world in general, in the weeks to come. What is certain is that the world is volatile and unpredictable at the moment. Australians are facing rising inflation – with the oil supply constraints driving this upwards – and difficulty in any measure to constrain this. Rate rises are barely making a difference to the bigger picture.

It’s little wonder why the ASX has been all over the place – with a decent fall since the start of March, and the occasional bursts of recovery on any suggestion of an end to the war in Iran.

As challenging as these periods can be to navigate, for value-hunting investors, volatility can provide an opportunity to pick up decent stocks at a discount. There are a range of ways investors can identify suitable stocks and generally, experienced investors will have a watchlist of a number of stocks so they can be ready at the right point in time and have a clear picture of value. But, if you don’t have a watchlist, an option to consider is starting your research with low Price-to-earnings (P/E) – that is how much you are paying for a company’s earnings.

Which Australian companies might be looking undervalued on the basis of P/E?

I’ve used Market Index’s Low P/E screen and filtered by broker consensus, narrowing it to a list of 5 companies ranked as Strong Buys. This filter has been chosen because it suggests a high conviction in the future prospects of the business across the industry.

A refresher on P/E ratios

As a quick explainer for the unfamiliar (or a refresher for others), P/E ratios are calculated as:

Current stock price/Annual earnings per share

They are typically based on historical data so you may find some inaccuracies leading into or during reporting season. They can also vary based on what calculations a broker uses for earnings. Market Index uses trailing 12 month returns, so if there’s been news of a jump in earnings coming in the months ahead, that won’t be factored in the ratio. Other sources may use forward earnings, or a blend of the two. 

A typical P/E ratio can also vary for different sectors – for example, in certain growth sectors like tech, you may expect to pay a much higher P/E ratio compared to a value sector.

The Australian stock market was trading on around 22.86x earnings at the end of March – the average is closer to 15x. To give some further context, Australia’s most expensive bank Commonwealth Bank is trading at 27.81x, while the big Australian (BHP) trades at 17.54x.

The list of high conviction low P/E stocks

Unsurprisingly, all the stocks listed face challenges in the current environment – particularly airlines and gold mining. Virgin has the lowest P/E ratio, but is operating in a highly competitive environment where rising fuel costs may challenge demand. Gold miners also face cost pressures from rising diesel prices. 

Consider this list an opportunity for research, with caution.

Source: Market Index, 6 April 2026

Qantas Airways (ASX: QAN)

Price $8.55 (1 April 2026)

Qantas released strong results in February, largely in line with market expectations. The reputation of the business has suffered in recent years, following criticism over so-called ‘ghost flights’, unlawful layoffs of staff during the Covid pandemic, well-publicised customer service issues, and challenges associated with an ageing fleet. The company has since invested in improving service and upgrading its aircraft.

Qantas’ shares have fallen heavily since the outbreak of the war in Iran. Investors may be concerned about the oil supply shock hitting airline prices and demand dropping off. Experts are looking at the longer term. Citi, for example, maintains a buy rating and a $12.10 price target. It expects some hit to earnings but not to the extent the market appears to be pricing in.

MPC’s Mark Gardner recently nominated Qantas as a pick for resolution of the war in Iran, highlighting that Qantas has the “strongest balance sheet in Australian aviation history, dominant domestic market share and international recovery still underway. Currently priced as if the fuel headwind is permanent — a 20–25% oil retreat will reverse the earnings math sharply.”

West African Resources (ASX: WAF)

Price $3,24 (1 April 2026)

The mid-tier gold producer recently announced a record 2026 gold production guidance and has been benefiting from the performance of gold prices.

Despite the gold price falling over 10% in the last month (as of 6 April), prices are still up over 55% for the last 12 months. Generally, the gold price benefits in uncertainty and rising inflation from a flight to safety in investors but prices were hit by profit taking, a level of market correction and a stronger US dollar. Gold’s prospects still look largely bullish, according to forecasts from JP Morgan and Deutche Bank, projecting prices over US$6,000.

West African Resources stands to continue to benefit from gold’s prospects. Macquarie has a Buy rating on West African Resources with a price target of $4.50, while Canaccord Genuity has a price target of $5.85 on the stock.

Katana Asset Management’s Romano Sala Tenna positioned West African Resources as one of his preferred names for gaining exposure gold prices and pointing to his worst-case valuation for it still being above current prices. 

Ora Banda Mining Ltd (ASX: OBM)

Price $1.12 (1 April 2026)

The Western Australian-based gold producer has strong near-term growth potential, though analysts have been wary of the 1-2 year short reserve life. The explorer and miner does have a much larger and growing total resource base.

Like West African Resources, Ora Banda Mining stands to benefit from gold prices – though also benefits from its Australian domicile, avoiding country-specific risks that West African Resources faces. In the past six months, the miner has announced high grade drill results in its Riverina underground operation and a tenfold resource boost in its Round Dam gold trend.

Canaccord Genuity views the stock as a Buy and has a price target of $1.55, Macquarie has a price target of $1.50, while Ord Minnett recently increased its price target to $2.00.

Ora Banda Mining has previously been discussed on Livewire’s Buy Hold Sell, with Tyndall Asset Management’s James Nguyen viewing it as a Buy and Wilson Asset Management’s Shaun Weick positioning it as a Hold. Both fund managers noted strong and experienced management and risks inherent in the gold market.

(Editor's note: While resources are significant following a recent upgrade, a 'resource' (Mineral Resource Estimate) only shows that mineralisation likely exists. While an Ore Reserve indicates than it's been assessed and is economically viable for production. There's no guarantee that a resource will become a reserve, and further investment is usually required. Reserves stood at 3.0 Mt at 2.4 g/t for 236 koz as at 1 July 2025 vs guidance of 140-155koz of production for FY26. Resources stood at 50,300 MT at 2.0 g/t for 3,310 koz as at 11 March 2025. - PP.)

Virgin Australia Holdings (ASX: VGN)

Price $2.30 (1 April 2026)

After collapsing during the Covid pandemic, Virgin Australia returned to the ASX in June 2025. Some analysts were mixed in the initial stages, with Morningstar cautious on the outlook. The airline exceeded expectations in its revenue and earnings per share for the first half of 2026. It is trading on a lower P/E ratio than Qantas.

Ord Minnett set a price target in late 2025 of $4.00 a share, while UBS increased its price target of $4.25.

Many fund managers were interested in Virgin Australia’s IPO, with Firetrail’s Oscar Gee positive about the outlook in a podcast in October while Ausbil’s David Lloyd shed his position in Virgin Australia last year off the back of concerns over its competitive positioning and increasing fuel refining margins.

Credit Corp Group (ASX: CCP)

Price $10.29 (1 April 2026)

Credit Corp Group is a debt buyer and collector, operating in Australia, New Zealand and the US. It also offers consumer lending via brands like Wallet Wizard.

Investors in Credit Corp Group haven’t had an easy run – it’s not only down on the year, it’s down on a five year basis too, though dividends have remained consistent throughout. Its half year 2026 result disappointed, with falls in debt collection and buying profit, along with lending profit, but a 63% jump in US debt buying net profit.

It has been negotiating a takeover with diversified non-bank financial services institution Humm Group (ASX: HUM) since November 2025, with the Humm Group board failing to disclose the takeover offer to investors until December 2025. Humm Group’s services are inline with Credit Corp Group – it offers business financing products, credit cards and point-of-sales finance plans. An independent board committee was established by Humm Group in March 2026 to consider and respond to Credit Corp’s takeover proposal and a confidentiality deed was signed to allow Credit Corp to undertake due diligence.

Credit Corp has seen increased short interest this year and off the back of the weaker report, Macquarie downgraded its rating to Neutral. Morgans have a Buy rating and a price target of $20.50 for Credit Corp. 

Caveat emptor

While these companies have strong ratings across brokers, there’s no guarantee this won’t change – and investors should keep an eye on the industries each operates in and the market environment we are working into.

For example, fuel supply pressures could hit airlines hard for some time so investors should be cautious of how quickly they may expect gains, even if the war in Iran was to be resolved in coming weeks.

Or, turning to the gold miners. As a physical asset, gold bullion may be viewed as less risky on the whole – but miners of the precious metal can experience volatility in their prices and activity and they are subject to geopolitical conditions and company challenges.

I’ll revisit these companies in a few months to see how they have performed since, and which new companies may rank in the charts for further research. Until then, happy investing and do your due diligence before investing.