Stock market crash bargains! I’d buy these 2 dirt-cheap FTSE 100 stocks in an ISA

The stock market crash has thrown up plenty of FTSE 100 bargains, including these two risky but potentially rewarding opportunities.

| 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.

Economic Uncertainty Ahead Sign With Stormy Background

Image source: Getty Images

The stock market crash has left many top FTSE 100 stocks trading at dirt-cheap valuations. If you’re looking to buy bargain shares, you are spoiled for choice right now.

Buying stocks that have been sold off in a stock market crash is risky, especially today. The economy faces a massive hit from Covid-19, and there could be more pain in the pipeline. However, history shows that buying shares at the moment of maximum uncertainty is a winning strategy.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

Here are two risky stocks that could pay off. Buy them inside your Stocks and Shares ISA for tax-free returns, and look to hold for the long term.

Whitbread share price slump

The hospitality and leisure sector has been hit harder than most, with people locked down or banned from travelling, or nervously cutting back on their spending. Hotel and restaurant operator Whitbread (LSE: WTB) has inevitably had a tough time of it. Its share price fell by more than half in the stock market crash.

It has also failed to benefit from the recovery. While many FTSE 100 shares have posted healthy gains lately, the Whitbread share price still trades 4% lower than six months ago. 

At the height of the first wave, Whitbread axed its dividend and temporarily shut all Premier Inn hotels in the UK and Germany. Last month, it announced 6,000 job losses, almost one in five of its workforce.

Whitbread, which also owns Brewers Fayre and Beefeater restaurants, trades at just 11.4 earnings today. This has alerted analysts at Berenberg, who reckon the current share price undervalues its real estate by half, leaving the group undervalued.

This is the type of opportunity investors should be sniffing out after a market crash. The Whitbread share price could fly out of the traps if, say, we get a vaccine or infection rates diminish. It’s a tempting buy, but risky given current unknowns.

Stock market crash opportunity

Property development and investment company British Land Co (LSE: BLND) also saw its share price fall by more than half in the stock market crash, with little recovery since. That’s despite announcing it was resuming its dividend payments earlier this month, as footfall and retailer sales picked up strongly.

British Land says its balance sheet remains strong, with £1bn of undrawn facilities and cash, with no requirement to refinance until 2024. It has collected 74% of June rents, 98% for offices and 57% for retail.

The pandemic has hit commercial property and bricks and mortar retailers as hard as the leisure and hospitality sector. If the pandemic worsens and unemployment rises, rents could be at risk. British Land has been investing heavily in central London office space, which hangs in the balance with the rise of home working.

These challenges are reflected in its valuation of 10.5 times earnings. You get a forecast yield of 3.7%. Like Whitbread, the British Land share price is cheap after the stock market crash, but comes with risks that some may found unacceptable.

More on Investing Articles

Lady researching stocks
Investing Articles

Here’s why I’m avoiding this dirt-cheap dividend penny stock!

A dirt-cheap, dividend-paying penny stock with a vast presence sounds good on the surface. This Fool isn't convinced, however.

Read more »

Asian Indian male white collar worker on wheelchair having video conference with his business partners
Investing Articles

These top income stocks look dirt cheap to me. I’d buy them now

I'm taking advantage of today's stock market weakness to load up on top value income stocks

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

Excessive stock trading erodes long-term gains!

Are high trading fees eating away at your returns? Research suggests that excessive stock trading could be to blame.

Read more »

Young woman sat at laptop by a window
Investing Articles

Pearson shares are up 25% since the market correction! Should I buy now?

Why have Pearson shares rallied since the market correction? This Fool looks at the educational provider in more detail and…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

Recession ready! I’d buy these FTSE 100 stocks for tough times

Jon Smith explains some of his favourite options for defensive FTSE 100 stocks that he's thinking of adding to his…

Read more »

A graph made of neon tubes in a room
Investing Articles

Down 45%, are these UK shares no-brainer bargains right now? 

Several top UK shares are down significantly and two companies on my list look like possible attractive buys right now.…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

I bought these 2 FTSE 100 shares two years ago. Should I now add to them?

Andrew Woods asks if he should add to his current holding in these two FTSE 100 shares ahead of a…

Read more »

Stack of British pound coins falling on list of share prices
Investing Articles

Has the Deliveroo share price bottomed?

The Deliveroo share price (LON:ROO) is down nearly 60% in 2022. Paul Summers asks whether it's now hit bargain territory.

Read more »