The Motley Fool

September sell-off: 2 FTSE 100 stocks I think are too cheap to miss

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.

Screen of price moves in the FTSE 100
Image source: Getty Images.

UK share markets have recovered robustly following the September sell-off of last week. The FTSE 100 has reclaimed the 7,000-point marker for instance and continues to chug higher.

But that doesn’t mean stock investors like me have missed the chance to go out and snap up some choice bargains.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Indeed, I went dip buying following September’s mini stock market crash. I bulked up my holdings in veterinary services provider CVS Group and logistics giant Clipper Logistics. And I’m still scanning UK share markets for shares I think are too cheap to miss following the correction.

These FTSE 100 shares, for example, are still cheaper than they were at the start of the month. Oh, and they boast dividend yields that soar above the Footsie 3.4% forward average following the September sell-off. Here’s why I’d buy them for my stocks portfolio right now.

7.2% dividend yields

The Polymetal International (LSE: POLY) share price has fallen around 8% since the start of September, the gold miner unsurprisingly following the value of precious metals lower.

Usually demand for safe-haven gold jumps when macroeconomic worries (like those recent ones about China’s property sector) reach fever pitch. However, the commodity has fallen in recent weeks because of a rising US dollar. The resurgent buck makes it less cost-effective to buy dollar-denominated assets.

Sure, there’s a risk that Polymetal might continue to fall if the greenback keeps picking up traction. I’d argue that at current prices it could be one of the best-valued FTSE 100 stocks to buy. The miner trades on a forward price-to-earnings (P/E) ratio of 9 times and sports a 7.2% dividend yield.

I think Polymetal could bounce back as global inflation rockets, an historical driver of gold prices. And I reckon the UK share could deliver terrific long-term returns as it accelerates development of its world-class precious metal projects.

Hand holding pound notes

A FTSE 100 stock with double-digit yields!

BHP Group’s (LSE: BHP) another mining share that provide tremendous bang for a buck. The FTSE 100 firm trades on a forward P/E ratio of 7 times. It carries an even-mightier 11.2% dividend yield too!

BHP’s share price has slumped a whopping 16% since the start of September. This is perhaps no surprise as the risk to its earnings in the event of a property market collapse would be considerable.

The diversified miner sources around seven-tenths of underlying earnings from the sale of iron ore which is used to make steel.

I’d argue that BHP still looks attractive from a risk/reward perspective at current prices however. If a meltdown in China can be averted (progress on which has been made in recent hours) then the firm should make splendid profits from the broader economic recovery over the next few years at least.

And the long-term outlook for its metals like copper is tantalising as spending on green projects (like electric vehicles and renewable energy projects) takes off.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Royston Wild owns shares of CVS Group and Clipper Logistics. The Motley Fool UK has recommended Clipper Logistics. 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.