ASX shares are trending lower today as investors digest the latest inflation data. According to ABS data reported yesterday afternoon, Australia's consumer price index (CPI) rose by 4.3% over the 12 months to September.
But when markets look a little shaky, I like to focus my attention on the ASX shares which look like they're trading for well below their potential value. I'd split my $6,000 investment equally into these two cheap ASX shares today.
Wildcat Resources Ltd (ASX: WC8) shares
ASX lithium share Wildcat Resources has fallen around 20% over the past month, and is now down 41% for the year to date, to 22 cents each, at the time of writing.
The shares have been depressed by a combination of falling lithium prices and a rotation away from higher risk shares.
But I see a potential rebound ahead.
Earlier this week, the lithium company posted the results from its latest definitive feasibility study for its 100%-owned Tabba Tabba project in Western Australia.
The study revealed that, using a base-case spodumene price of US$1,500 per tonne, the project has a post-tax net present value of around A$1.5 billion. This includes a 28.4% internal rate of return with an expected ramp up to 600ktpa in year three, which is four years earlier than forecasted in the preliminary feasibility study in 2025.
This is excellent news for the company because this study proves that the project has huge potential value.
Aside from the company's large project value, I also expect it to benefit from an improving lithium price over the medium to long term.
If lithium demand from EVs and battery storage keeps rising, the ASX shares could be well-placed to snap up a large portion of the demand.
At just 22 cents each, the stock is now trading at a significant discount relative to the volume and value of lithium in the ground at its site.
Wildcat is targeting a final investment decision for its Tabba Tabba project in the first half of 2027. Production is expected to begin in Q1 of 2029.
Market Index data shows that all brokers have a strong buy rating on the shares. The 90 cent target price implies a potential 300% upside, at the time of writing.
Catalyst Metals Ltd (ASX: CYL) shares
Catalyst Metals shares are down around 8% over the past month, and are 30% lower for the year to date, to $5.19 apiece, at the time of writing.
The ASX gold shares spiked to an all-time high in January when it announced a significant new high-grade discovery at its Plutonic Gold Belt. But then the ASX shares shed around 52% of their value to an annual low in early June.
The crash was mostly the result of headwinds from a weaker gold price, higher mining costs, and an investor rotation away from gold shares.
Despite the multiple headwinds, the company has continued progressing well, reaching record quarterly production in the June quarter, and the miner has confirmed several increases to its reserves across multiple sites since then.
The company's FY26 results in August were also strong, with strong metrics across the board. Highlights include a 39% increase in revenue, to a record $632 million year on year, and a 57% increase in EBITDA to a record $303 million.
Management also confirmed that it expects growth to continue in the coming years as it develops and ramps up production at its Trident underground, Old Highway, and Cinnamon sites.
At the $5.19 share price at the time of writing, the ASX shares look cheap to me, with incredible potential ahead. Catalyst Metals shares are trading at a price-to-earnings (P/E) ratio of around 7.67. The average P/E ratio for the ASX miners is typically much higher.
Market Index data shows that all brokers have a strong buy rating on the ASX shares. The average target price of $10.89 implies a potential 110% upside at the time of writing.
The post 2 cheap ASX shares I'd buy with $6,000 today appeared first on The Motley Fool Australia.
Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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