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Cheap UK shares: 3 FTSE 100 stocks I’d buy and hold now

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Even though the FTSE 100 index has gained much lost ground in the last three months, some constituent stocks aren’t having it that good recently. The share price drop of some of these shares caught my eye today. In my view these now cheap UK shares are high-quality stocks that deserve a closer look, if nothing else.

Here are three of them:

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#1. Anglo American: volume increases

The first of these is the FTSE 100 multi-commodity miner Anglo American (AAL), whose share price has fallen for no apparent reason that I can see. It’s down 5% in today’s trading. Unless there are any developments that haven’t made it to the news yet, I reckon that the share price will be back up soon

Even with the fall, AAL’s share price is trading near multi-year highs, and for good reason. The stock market rally, as I have been saying in my other articles, has been particularly rewarding to performing companies. AAL is one of them. 

In December it said that over the next three to five years it will deliver “sector leading” volume growth of 20%-25%. This will bolster the already strong position of the De Beers owner. 

Its earnings ratio is at 15.9 times right now, which makes it closer to cheap UK shares than not, in my view.

#2. Just Eat Takeaway: fast growth

Food delivery app, Just Eat Takeaway (JET) is another big faller with a decline of around 5% too. On the face of it, this is somewhat unexpected going by the stellar results it posted earlier this week. 

Lockdowns have resulted in increased popularity for food deliveries, and JET has been in a good place to cater to exactly that demand. As a result, it’s expecting an over 50% increase in revenues this year. 

I’m a big believer in the e-commerce story. And the food delivery market is growing too. I think that JET as a big delivery giant is well placed to grow because of that. I don’t worry too much about the current share price fall. 

#3. DS Smith: FTSE 100 stock resumes dividends

The FTSE 100 packaging company saw a 4.5% fall today, though its long-term story remains intact. In an economic slowdown, packaging demand can be expected to fall on lower activity levels. But 2020 saw a slowdown like no other. 

With a heavy bias towards online shopping, the demand for packaging hasn’t declined as would otherwise be anticipated. In fact, with an acceleration in the shift towards e-commerce, it may have even increased forever. 

This has even enabled DS Smith to stay profitable at an otherwise challenging time and it resumed its dividends too, albeit with sub-1% yield. I think it’s a good buy for the next few years as the e-commerce trend plays out more. It doesn’t hurt that it pays a small dividend too. 

With a price-to-earnings ratio of 12.4 times, when many other stocks have seen much sharper increases, it qualifies as a cheap UK share too. 

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Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended DS Smith and Just Eat Takeaway.com N.V. 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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