Writing in its August 2018 monthly update, the Spheria Australian Microcap Fund highlighted two small-cap ASX stocks that look to be trading at insanely cheap valuations. One of them even trades on a 9.3 per cent fully franked dividend yield.
The fund has previously discussed Vita Group (ASX:VTG), the company best know as the operator of Telstra branded stores.
The risk with Vita shares is that it has just one supplier, being Telstra Corporation (ASX:TLS). Lose that one contract, and Vita shares go up in smoke.
But such deals cut both ways, with Vita Group also being strategically important to Telstra given the smaller company influences around $1.5 billion of Telstra’s revenue.