Is it finally time to buy these beaten-down FTSE 100 stocks?

These two FTSE 100 (INDEXFTSE: UKX) stocks have sunk recently. Is now the time to pile in?

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While investor appetite for Sage Group (LSE: SGE) has snapped to three-month highs in recent sessions, the stock remains some way off the record peaks of around 760p struck last October.

Indeed, the business software specialist is dealing at a 13% discount to the lofty levels seen last autumn. And I believe this provides a great opportunity for dip buyers to get in on the FTSE 100 star.

Stock pickers took flight in autumn as fears of an intensifying sales slowdown took hold, concerns that were given additional fuel following January’s trading statement for the first fiscal quarter. Sage advised back then that organic sales rose 5.1% during September-December, cooling from the 6.6% advance punched in the corresponding 2015 period.

However, those pressing the panic button could be seen as acting somewhat prematurely. After all, chief financial officer Steve Hare commented in January that “Q1 results are broadly in line with our expectations,” affirming Sage’s view that “the early part of FY17 would start more slowly, with growth accelerating through the year and into FY18.”

The company remains on track to achieve robust full-year revenue growth of 6%, Hare added.

Growth great

City brokers certainly expect sales at Sage to keep strolling higher, and in turn deliver earnings rises of 17% in the year to September 2017 and 9% in fiscal 2018.

While a forward P/E ratio may ride above the FTSE 100 historical average of 15 times, this is still great value as the move to a subscription-based product structure gathers pace and each of the company’s major territories (aside from the US) either performs in line or exceeds forecasts. Indeed, Sage saw subscription sales rocket 31% higher during the first fiscal quarter.

On top of this, I also believe its terrific cash generation makes it one of the Footsie’s hottest growth dividend stocks. The company registered robust free cash flow of £254m last year, facilitating an 8% full-year dividend hike.

And the Square Mile expects this uptrend to continue, with last year’s payout of 14.15p per share anticipated to rise to 15.7p in this fiscal period and to 17.4p in 2018. These projections yield a handy-if-unspectacular 2.4% and 2.6% respectively.

In a hole

Like Sage, Anglo American (LSE: AAL) has been no stranger to extreme share price weakness more recently as fears over the iron ore market have resurfaced.

The mining giant’s share price has slipped 15% from the two-and-a-half-year peaks struck in February. And I reckon more trouble could be in store as Chinese inventories steadily bulge, casting doubts over whether domestic demand is strong enough to suck up the growing amount of seaborne supply.

The City still believes Anglo American should keep its growth recovery rolling with a 32% advance in 2017. But a predicted 26% decline next year underlines the shaky footing the company — nay, the entire mining industry — currently finds itself on as supply/demand balances worsen.

So while Anglo American may appear terrific value on paper, the business boasting a prospective earnings multiple of 6.4 times, I reckon the digger remains an unappealing pick for shrewd investors.

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 shares mentioned. The Motley Fool UK has recommended Sage Group. 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.

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