FTSE 100 bargains: the best stocks to buy right now

These FTSE 100 companies could be some of the best stocks to buy right now based on their long-term recovery potential and current valuations.

| 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.

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.

Stock markets around the world have rallied in the first few weeks of 2021. However, the FTSE 100 has lagged behind its global peers. As such, I believe some of the best stocks to buy right now could be hidden in this index. 

Here are three companies, in particular, that stand out to me as being undervalued today. 

The best stocks to buy right now

BT (LSE: BT.A) is one company investors love to hate. The telecommunications giant has produced relatively poor returns for investors for the past five years. It is easy to understand why. The group has been haemorrhaging customers, it has a lot of debt, and the organisation recently eliminated its dividend

Nevertheless, despite these challenges, BT is trying to change for the better. It is investing more in customer service and infrastructure. I think these investments will help the company return to growth, although it still faces substantial competition from peers and has a mountain of debt to manage. 

Despite these challenges, I think the FTSE 100 stock has potential. That’s why I would buy the company for my portfolio today. 

Banking recovery

NatWest (LSE: NWG) is another company that investors aren’t always keen on. The group, which was formerly known as RBS, is still majority-owned by the UK government after being bailed out in the financial crisis.

Following the pandemic, NatWest’s outlook is pretty mixed. The group is expecting to write off billions of pounds of defaulted loans. Low interest rates have also curbed its profit margins. These risks won’t go away any time soon. 

Looking past these issues, however, NatWest’s long term outlook is improving. If the UK economic recovery starts to gain traction over the next 12 months, the group may see an improvement in demand for loans and mortgages. That would help its bottom line. Regulators have also given the green light for the firm to reintroduce dividends

With the stock trading at a significant discount to book value at the time of writing, I think this could be one of the best shares to buy now to capitalise on the recovery. That’s why, despite the risks outlined above, I’d buy it now. 

FTSE 100 recovery play 

Another recovery play I would buy today is British Land (LSE: BLND). Shares in this organisation have fallen dramatically over the past 12 months. However, the decline has outpaced the fall in the value of the company’s property portfolio. I think this presents an opportunity.

As the UK economic recovery gets under way, British Land may see an increase in rent collections and property values. This could lead to a significant improvement in investor sentiment towards the business, propelling shares in the FTSE 100 real estate investment trust higher. 

That being said, there’s no guarantee the UK economy will improve markedly over the next 12 months. Commercial property values could continue to decline, putting additional pressure on the company’s balance sheet. In the worst-case scenario, British Land may even have to ask shareholders for more money to keep creditors at bay. 

These risks could hurt the company’s long-term potential. Still, I think it’s one of the best shares to buy now as a way to profit from a potential economic recovery. 

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.

Rupert Hargreaves owns shares in British Land Co. The Motley Fool UK has recommended British Land Co. 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.

More on Investing Articles

artificial intelligence investing algorithms
Investing Articles

I asked Google AI for the best UK stocks for me to buy for 2025. Here are 5 names it gave me

Dr James Fox turned to artificial intelligence to explore the best UK stocks to buy in 2025. Here’s what Google’s…

Read more »

Investing Articles

2 no-brainer growth shares to consider in 2025!

These FTSE 100 and FTSE 250 growth shares delivered impressive share price gains in 2024. I think they should continue…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

How much would an investor need in an ISA for £800 in monthly passive income?

Generating a healthy dollop of monthly passive income need not remain a pipe dream. Paul Summers has whipped out his…

Read more »

Investing Articles

Has Tesla stock had its best days already?

Tesla stock has jumped around 70% in just a couple of months. Our writer likes the business -- but he's…

Read more »

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

In 3 steps, a new investor could start buying shares with just £500

Christopher Ruane outlines a trio of moves he thinks someone with a spare few hundred pounds could consider if they…

Read more »

Investing Articles

Up 513%! Can the Rolls-Royce share price  keep soaring in 2025?

Our writer sees reasons why the Rolls-Royce share price could go either way this year. Here's why he has no…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

£10,000 invested in Nvidia stock in 2020 would now be worth £244k! Here’s what could be next

Nvidia stock’s dominated the ‘picks and shovels’ market for artificial intelligence, but Dr James Fox believes it could be primed…

Read more »

Investing Articles

Next shares: the best FTSE 100 stock money can buy?

Next shares have performed brilliantly in recent years. Today's numbers suggest this momentum could continue into 2025, thinks Paul Summers.

Read more »