The recent downturn in stock markets around the world provides an excellent deep-buying opportunity for me, I think. Here are two dirt-cheap FTSE 100 I will spend 1,000 shares on each today.
An FTSE 100 fowler owned by me
Packaging Manufacturer DS Smith (LSE: SMDS) is a highly cyclical part. So it is probably not surprising that concerns about massive inflation and the possible collapse of the economic recovery have led to its stock price sinking late. The price of the FTSE 100 firm has dropped 13% since the beginning of September.
Yet I think this drop leaves DS Smith trading in the bargain-basement area. The boxmaker trades at a forward PEG ratio of only 0.5. A reminder that a reading below 1 is recommended can be evaluated by a stock market. In addition, DS Smith has a meat-like 3.9% dividend yield, better than the FTSE 100 3.4% average.
I do not deny that this could lead to significant unrest in the short-medium term. But I think the company remains a great buy for the long term. The demand of its packaging Should E-commerce continues to grow, an area where it has invested heavily in recent years. Its growing focus on environmentally friendly products will also help capitalize on the so-called green revolution. And finally, there is plenty of liquidity to continue the shiny acquisitions of the FTSE 100 firm, a field where it has had success for many years. I am thinking of expanding my partnership in the futsal business at current prices.
7.3% dividend yield
Concerns over supply chain problems and subsequent rising building costs have hit homebuilding stocks in recent weeks. The problem of material scarcity is so bad that the head of the Chartered Institute of Procurement and Supply has described the government’s plan to build 300,000 new homes a year.Almost impossible”
The recent disappointment has also added to the possibility that the Bank of England rate hike is likely to be faster than forecast. But are these dangers now baked into the FTSE 100-listed share price Berkeley Group (LSE: BKG)? I think they could be. The price of this cheap UK share has fallen 13% since the beginning of September. It now trades at about 11 times the forward P / E ratio and carries a huge 7.3% dividend yield.
I bought shares based on what I can expect on a long-term horizon, say a decade or more. And I believe Berkeley is an interesting buy on this basis, and especially at current prices, even in the face of sector risk. I like the focus of this housebuilder in London, one of the most popular cities for people to live in and the economically resilient southeast of England. I also believe that the demand for home buyers across the country should be lower than the supply for years to come in the future because of low interest rates, generous mortgage products, and government support for first-time buyers to stay here.
Like DS Smith, I think Barclays bought a great FTSE 100 share after the recent stock price weakness.
5 stocks to try to make wealth after 50
Coronavirus epidemic disrupts markets around the world …
And many big companies that are trading at ‘discount-bin’ prices may now be able to bargain for potential investors.
But whether you are a novice investor or an experienced professional, deciding which stocks to add to your shopping list can be a dangerous prospect at such an unprecedented time.
Fortunately, The Motley Flower is here to help: We have five companies shortlisted by the UK’s chief investment officer and his analyst team that they believe have the potential for long-term growth despite a global lockdown.
You see, here in The Motley Flower we don’t believe that “over-trading” is the right path to financial freedom in retirement; Instead, we purchase and hold (for at least three to five years) 15 or more quality companies, led by a shareholder-centric management team.
That’s why we’re sharing the names of these five companies in a special investment report that you can download for free today. If you are 50 or older, we believe these stocks may be suitable for any diversified portfolio, and you can create a position in the top five right now.
Ryston owns shares in Wild DS Smith. Motley Full UK has recommended DS Smith. The opinions expressed in the companies mentioned in this article may differ from those of the authors and therefore the official recommendations we make on our subscription services such as Share Advisors, Hidden Winners and Pro. Here at The Motley Flower we believe that considering a variety of insights makes us a better investor.