£3,000 to invest? 2 cheap FTSE 100 shares I’d buy in an ISA to get rich and retire early

These two cheap FTSE 100 (INDEXFTSE:UKX) shares could offer good value for money and long-term recovery potential for ISA investors, in my view.

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The FTSE 100 continues to trade over 20% down on its 2020 starting price. As such, there are a number of cheap stocks available to buy after the market crash.

Here are two prime examples. They may face uncertain operating conditions in the short run. However, their growth strategies and a likely economic recovery could mean that they offer good value for money.

Buying them now could improve your ISA returns. Investing £3k, or any other amount, in them may also help to bring forward your retirement date.

A cheap FTSE 100 share with recovery potential

The Lloyds (LSE: LLOY) share price has significantly underperformed the FTSE 100 since the start of the year. It’s currently down 57% year-to-date. Factors such as a weak economic outlook and a likely prolonged period of low interest rates are negatively impacting investor sentiment.

The company’s recent results highlighted the progress being made in implementing its strategy. This includes using robotics to reduce costs on administrative tasks. It’s also investing in digital capabilities to differentiate its service from those of its rivals. This has led to relatively high customer satisfaction ratings that could strengthen the bank’s long-term growth prospects.

With the Lloyds share price currently trading on a forward price-to-earnings (P/E) ratio of just 8, it appears to offer a wide margin of safety relative to other FTSE 100 stocks. However, this doesn’t mean it will quickly recover due to the challenging outlook for the UK economy.

But its long-term prospects appear to be relatively sound. As such, now could be the right time to buy while it trades at a discount to its intrinsic value.

Improving growth prospects

JD Sports Fashion (LSE: JD) is another FTSE 100 share that seems to offer good value for money. The retailer has experienced a significant amount of disruption in recent months that’s set to cause a decline in profitability this year. However, its online growth capabilities and store reopenings mean its financial prospects are set to improve.

In fact, it’s forecast to post a 65% rise in net profit next year after a challenging current year. This puts the stock on a price-to-earnings growth (PEG) ratio of just 0.4. This is relatively low and indicates it offers good value for money compared to many of its index peers.

Moreover, UK consumer spending has been increasing at a surprisingly fast pace since lockdown measures began to ease. This suggests that the outlook for FTSE 100 retailers such as JD Sports Fashion may be more robust than investor sentiment suggests.

As such, now could be an opportune moment to buy the stock. Its international expansion plans and online growth opportunities could deliver impressive capital returns. And that could certainly help boost the value of your ISA in the coming years.

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.

Peter Stephens owns shares of Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking 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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