2 FTSE 100 value stocks I’d buy to target long-term riches!

Buying stocks below their value can supercharge an investor’s long term returns. Here are two value stocks I’m thinking of buying today.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Smart young brown businesswoman working from home on a laptop

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

The FTSE 100 is packed with brilliant shares that are trading below what they’re truly worth. I’ll be looking to add the following value stocks to my portfolio when I have spare cash to invest.

JD Sports Fashion

Created with Highcharts 11.4.3JD Sports Fashion PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Athleisure has been one of the fastest-growing fashion segments of recent years. And according to market experts, consumer demand will continue surging. Analysts at Grand View Research, for instance, think the market will grow at an annualised rate of 9.1% between now and 2030.

Should you invest £1,000 in Glencore Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Glencore Plc made the list?

See the 6 stocks

Retailer JD Sports Fashion (LSE:JD) is one UK share that is booming on the back of this fashion trend. The company expects pre-tax profits to break through the £1bn barrier this year. Organic revenues were up 15% at constant currencies in the 13 weeks to early May.

The FTSE 100 firm is expanding rapidly to allow it to enjoy strong and sustained sales growth, too. It is looking to add 1,750 new stores to its 3,390-strong global estate over the next five years. This month the athleisure specialist also announced plans to acquire French sports fashion retailer Courir.

Tough economic conditions pose a threat to retailers like this. But I think this is reflected in the firm’s ultra-low valuation.

Today the company trades on a sub-1 forward price-to-earnings growth (PEG) ratio of 0.8. This (at least in my opinion) makes its shares too cheap to ignore.

Glencore

Created with Highcharts 11.4.3Glencore Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Commodities businesses like Glencore (LSE:GLEN) also face enormous pressures in the near term. As the global economy cools, this FTSE share — which produces and markets metals and energy products — could see demand for its products and services drop.

Fresh economic data from China has exacerbated the sense of gloom surrounding mining companies. Industrial production in April rose just 5.6%, less than half what analysts had been expecting.

But as a long-term investor I’d be prepared to accept some near-term turbulence. This is because undersupply in many raw material markets is tipped to worsen considerably. In this scenario, prices across the commodities suite could shoot through the roof.

Take copper, for example, a major earnings driver for Glencore. Consumption is set to soar as the green energy revolution continues and spending on electric vehicles and renewable energy projects rises.

At the same time, global red metal production is on course to decline on falling output from existing mines and a weak pipeline of new projects. It’s why research firm Wood Mackenzie expects a huge 9.7m copper market deficit in the next decade.

Glencore is well placed to exploit this favourable market outlook, too. It has enormous financial headroom that should allow it to grow earnings through organic investment and acquisition activity. Net debt toppled to just £75m as of the end of 2022.

It’s my belief that the miner’s low valuation reflects the huge returns it could deliver over the long term. The firm currently trades on a forward price-to-earnings (P/E) ratio of 6.9 times. I think that this — along with its mighty 10.8% dividend yield — makes Glencore one of the FTSE’s hottest value stocks.


Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Like buying £1 for 51p

This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

More on Investing Articles

Rolls-Royce's Pearl 10X engine series
Investing Articles

Rolls-Royce shares have reached £10. Too late to buy?

Selling for pennies as recently as 2022, Rolls-Royce shares recently topped a tenner apiece. Our writer assesses whether he's too…

Read more »

UK coloured flags waving above large crowd on a stadium sport match.
Investing Articles

Meet the $2 stock up 366% that UK investors are piling into

UK stock investors have been snapping up this meme stock recently. Incredibly, it has more than quadrupled since June! What's…

Read more »

Middle-aged Caucasian woman deep in thought while looking out of the window
Investing Articles

Down 49%, is this well-known name the deep-value stock it seems?

Our writer has been tempted to add more B&M shares to his portfolio after a recent tumble. So what's holding…

Read more »

Abstract 3d arrows with rocket
Micro-Cap Shares

After falling 80% from a 52-week high, is this penny share a screaming buy?

This penny share company skyrocketed earlier this year, but the share price has since fallen back. Is it a new…

Read more »

British Pennies on a Pound Note
Investing Articles

This penny stock rose 49% in a year. Here’s why it may still be a terrific bargain

This penny stock has soared by 49% in 12 months -- but still sells for far less than the sum…

Read more »

Businessman using pen drawing line for increasing arrow from 2024 to 2025
Investing Articles

MHA is a UK stock market success story that deserves your attention

MHA listed on the UK’s stock market in April and has performed extremely well. Dr James Fox explains why the…

Read more »

A senior man using hiking poles, on a hike on a coastal path along the coastline of Cornwall.
Investing Articles

£20,000 in savings? Here’s how a Stocks and Shares ISA could generate £621 a month of passive income – tax-free!

Christopher Ruane explains how a Stocks and Shares ISA could potentially generate sizeable long-term passive income streams from proven businesses.

Read more »

A rear view of a female in a bright yellow coat walking along the historic street known as The Shambles in York, UK which is a popular tourist destination in this Yorkshire city.
Investing Articles

Up 269% in 5 years, could the Marks and Spencer share price go even higher?

Christopher Ruane explains some of the reasons the Marks and Spencer share price has boomed in recent years -- and…

Read more »