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I love buying cheap stocks and there are some incredible FTSE100 There are bargains to be had at the moment. Especially these three.
Last Sunday (4 August) I noticed that the Blood pressure (LSE: BP) share price was at a 52-week low and I said it looked like the “Bargain of the year!”
Great value for money?
The oil giant’s shares have since fallen another 2.48%. Over the past 12 months, they have fallen 10.57% and are now trading at just 6.26 times earnings. Even better, they yield 5.18%.
The company’s profits and stock price soared during the energy crisis, but when oil prices fell, they halved from $27.2 billion to $13.8 billion in fiscal 2023.
BP continued to reward long-term shareholders, increasing its dividend by 10% and buying back $7.9 billion worth of shares. At £20.9 billion, the group’s net debt is at a ten-year low.
Although Brent oil is now below $80 a barrel, investors still don’t want to hear about it. Others are cautious as BP doubles down on fossil fuel investments despite the push for net zero emissions. Energy stocks are cyclical and I think the right time to buy BP is when the price falls, not when it rises. Global warming poses risks, but I will buy when I have the money.
Speaking of climate change: In July, I pointed out to the insurer Lloyds of London Beazley (LSE: BEZ). As a specialty risk insurance and reinsurance company, it will cover the costs of tomorrow’s floods, storms and hurricanes.
This partly explains why the stock price is so cheap, trading at just 4.47 times earnings, despite shares up 35.27% in 12 months, boosted by a 155% increase in pretax profits in 2023 to a record $1.25 billion.
The good form continues, with half-year results released on August 8 showing record pre-tax profits of $728.9 million, almost double the previous year’s profit of $366.4 million. Beazley was the best FTSE 100 performer last week, up 12.53 percent.
NatWest Group is back
The yield of 1.96% is on the low end, but that’s partly due to the booming share price. Another stock I’ll buy when I have the money.
NatWest Group (LSE: NWG) is also on a winning streak, with its shares gaining 58.4% over the past six months, making them the second-best performer in the FTSE 100. Only Darktrace has risen faster, up 68.2%. Over the last 12 months, NatWest has risen 38.85%.
The big banks are finally reaching their potential and NatWest’s share price is the leader. However, the stock is still surprisingly cheap at 6.67 times earnings. The yield is also attractive at 5.11%.
The Labour Party’s decision to abandon plans to sell the government’s remaining stake in NatWest has boosted the share price as shares will now not flood into the market at discounted prices.
Analysts at Berenberg have raised their price target to 415 pence. Today, NatWest shares are trading at 334 pence, giving a 25% upside potential.
It is not all happy days, however. First-half profits fell 15.6% to £3.03bn, while net interest margins fell 16 basis points to 2.07%. Margins could fall further if interest rates are cut. Nevertheless, I would still buy NatWest at today’s low valuation if I were not already over Lloyds Banking Group.
