Stock market crash: 3 cheap FTSE 100 shares I’d buy in July

Since the Covid-19 stock market crash, many FTSE 100 shares have rebounded sharply. These three stocks still looks very cheap though, says Edward Sheldon.

| 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.

sdf

Since the Covid-19 stock market crash, many FTSE 100 shares have rebounded sharply. Plenty of stocks are still well below their 52-week highs though. This suggests there could be further gains to come, assuming the market doesn’t crash again.

With that in mind, here’s a look at three cheap FTSE 100 shares that I believe look attractive right now.

The CEO is buying here

One that seems very cheap to me right now is Mondi (LSE: MNDI). It’s a leading packaging company that has a focus on sustainable packaging solutions. It sports a P/E ratio of just 11.9, using next year’s consensus earnings per share (EPS) forecast of €1.38.

There are a number of things I like about Mondi. Firstly, the company has exposure to growth industries, such as e-commerce. Secondly, the group is committed to sustainability. Third, it’s a highly profitable company. Over the last five years, return on capital employed – a key measure of profitability – has averaged about 18%.

One thing that’s caught my attention here is that CEO Andrew King has purchased MNDI shares recently. On 29 June, the insider purchased 15,000 shares at a price of £14.96 per share, boosting his holding by nearly 200%. This suggests King believes the FTSE 100 stock is undervalued.

All in all, I think Mondi shares look very attractive right now.

This FTSE 100 company is still paying dividends

Another FTSE 100 share that I think looks cheap right now is M&G (LSE: MNG), the asset management business that was demerged from Prudential last year. It currently trades on a forward-looking P/E ratio of 8.2 using this year’s consensus EPS forecast.

In late May, M&G issued an encouraging business update. Not only did the company advise it’s in a position of financial strength, but it also said it would pay out dividends to investors as previously announced. I’m impressed by its commitment to its dividend, given that so many FTSE 100 companies have suspended, or cancelled, their dividends this year.

Like Mondi, M&G has also seen some bullish insider transaction activity recently. Back in March, a number of top-level insiders purchased shares, including the CEO, CIO, and chairman. That’s a positive development, in my view.

Overall, I see plenty of appeal in M&G. I see the stock as a buy right now.

A FTSE stock for the sustainable revolution

Finally, I also like the look of Johnson Matthey (LSE: JMAT) at the moment. It’s an under-the-radar FTSE 100 company that specialises in sustainable technologies, including batteries for electric vehicles and catalytic converters. Its share price is down about 30% this year and the stock currently trades on a forward-looking P/E ratio of about 13.4.

Johnson Matthey has been hit hard by Covid-19. Recently, the group announced it booked a £60m charge related to the outbreak and said it would cut 2,500 jobs to cut costs. It also cut its dividend by 50%, bringing an end to its very impressive dividend growth track record (20+ years).

I expect the FTSE 100 company to recover though. In a world that’s becoming increasingly focused on sustainability, Johnson Matthey looks well-positioned to succeed. As green technologies are increasingly embraced, the company should benefit.

I’d snap up this cheap FTSE 100 stock while it’s out of favour.

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.

Edward Sheldon owns shares in Mondi and Prudential. The Motley Fool UK has recommended Prudential. 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

4 Teslas in a parking lot at a charger station
Investing Articles

The Tesla share price slips further — how much would £10k invested at the start of the year be worth now?

The Tesla share price remains under pressure, with risks mounting from multiple directions. Here’s what a £10,000 investment would be…

Read more »

British pound data
Investing Articles

The Ocado share price is a sea of red! Time to cut my losses?

Every time Harvey Jones checks out the Ocado share price, he sees red. Will it ever stop falling and leaving…

Read more »

Road 2025 to 2032 new year direction concept
Investing Articles

Over the next 5 years, I think these S&P 500 stocks will make me more money than a global index fund can

Edward Sheldon believes that these two high-quality S&P 500 growth stocks have the potential to beat the market over the…

Read more »

British union jack flag and Parliament house at city of Westminster in the background
Investing Articles

Over the last 2 years, this investment trust has doubled the FTSE 100 index’s return

Here are three key reasons why our writer reckons this high-quality investment trust from the FTSE 100 index is worth…

Read more »

Black woman using smartphone at home, watching stock charts.
Investing Articles

Keep an eye on this FTSE 100 stock in the week ahead

The last time Bunzl issued a trading update, the stock fell 25%. So could the FTSE 100 stock be set…

Read more »

Black woman using smartphone at home, watching stock charts.
Investing Articles

This FTSE 100 bank is up 60% in year but still cheap with a P/E of just 9!

Harvey Jones has overlooked this FTSE 100 bank, until today. It's been bombing along yet still looks decent value. But…

Read more »

Businessman hand stacking money coins with virtual percentage icons
Investing Articles

Stocks and Shares ISA in the red? Here’s how to try and get back on track

Despite upward momentum in the stock market, not every Stocks and Shares ISA’s in the black. Zaven Boyrazian explores strategies…

Read more »

Array of piggy banks in saturated colours on high colour contrast background
Investing Articles

Could missing this dividend stock in 2025 be a costly mistake?

Before 2022, this dividend stock was beating the market by more than four times! Could it be about to do…

Read more »