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2 cheap FTSE 100 stocks to buy

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Following the recent FTSE 100 drawdown, I’ve been looking for cheap blue-chip stocks to buy for my portfolio. Here are two, one I already own, and one I wouldn’t hesitate to buy. 

FTSE 100 bargains

The first stock on my list is the broadcaster ITV (LSE: ITV). Shares in the company collapsed when advertisers pulled their spending on its platforms at the beginning of the pandemic. However, even though spending has since recovered, the stock doesn’t seem to be recognising the recovery. 

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According to the group’s latest trading update, total revenue for the three months to the end of March increased 2% compared to the same period a year ago. Advertising spending for the first four months of 2021 was up 6%. Meanwhile, its Studios production arm saw revenue increase 9%. 

While these figures aren’t fantastic, they show the company’s heading in the right direction. Unfortunately, it also faces several risks and challenges that could hold back recovery in the months ahead. These include competition with US streaming giants and another potential coronavirus wave, which could, once again, lead to a fall in advertising revenue. 

However, the company is trying to get around these issues. It’s investing more on its online business, digital advertising and venture capital arm. 

Therefore, despite the above risks, I think the outlook for the FTSE 100 business is looking up. With shares in ITV still trading 23% below their year-end 2019 level, I’d add to my position in the stock today

Market recovery 

Like ITV, the coronavirus pandemic slammed into Compass (LSE: CPG) like a hurricane. The company, which is one of the world’s largest catering groups, saw much of its business evaporate overnight. Important to its core business, Compass caters to events such as conferences and film production. 

But now, the enterprise is making headway in its recovery. For the six months to the end of March, the group’s revenue fell 30% from the year-ago period, and profits decline 65%. Nevertheless, towards the end of the period, the firm’s operating profit margin recovered to 4.2%, up from 2.7% in the first quarter. 

Further, new business wins increased by around 20%, and 95.6% of customers stayed with the company. 

However, the FTSE 100 company continues to face some significant risks to its recovery. Large events around the world are only returning gradually, and other variants of coronavirus could emerge, which would setback reopening plans. 

There’s also a risk demand for the company’s services may never return to pre-Covid levels if the pandemic drives lasting changes in working practices.

Still, despite these risks and challenges, I’m encouraged by the company’s size, progress and potential. It’s also encouraging to see the business is generating cash and profits, which management can use to buy growth through acquisitions, or pay down debt. 

After taking this growth potential into account and considering the fact that the stock is trading around 21% below its year-end 2019 level, I’d buy shares in the FTSE 100 firm for my portfolio today. 

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Rupert Hargreaves owns shares of ITV. The Motley Fool UK has recommended Compass Group and ITV. 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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