The Motley Fool

3 cheap FTSE 100 stocks to watch in October

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.

macro shot of computer monitor with FTSE 100 stock market data in trading application
Image source: Getty Images

As well as having a reputation for being a rather volatile month for markets in general, October also sees a raft of updates from many FTSE 100 stocks. Here are just three that should receive considerable attention from investors (including myself) over the next few weeks.

Cheap commodities play

Top-tier mining giant Rio Tinto (LSE: RIO) is scheduled to release an update on operations slap bang in the middle of October. Based on its last statement, I don’t think there’s too much for existing holders to worry about. Back in July, the company announced it had achieved record financial results over the first half of 2021.

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!

Unfortunately, one clear issue with RIO (and the other FTSE 100 miners) is that it has very little control over the price of what it digs up. It’s also susceptible to wider economic concerns. News of a slowdown of growth in China, for example, has contributed to an 11% reduction in the share price over the last month.

Despite this loss of momentum, I must say I’m very tempted to add some RIO to my own portfolio. A P/E of just five looks great value given its rock-solid finances and monster dividend yield. The potential for a commodities supercycle, due to demand for renewable energy sources, is another big attraction.

Trouble at the top

Pharma giant GlaxoSmithKline (LSE: GSK) is another stock that will be put under the market’s microscope next month. It’s down to provide an update on Q3 trading on 27 October. Those already invested will surely be hoping there’s something to take the focus off the ongoing tension between CEO Emma Walmsey and activist investors.

The latest of the latter to get involved is London-based hedge fund Bluebell Capital Partners. It’s pushing for someone with more scientific experience to take the helm after the company spins off its consumer health arm in 2022.

With the share price up only 1% or so year-to-date, you can see why frustration’s growing. And, ironically, the longer GSK trades sideways, the longer investors will refrain from prioritising its stock over others.

Notwithstanding this, I still think the valuation — at 14 times earnings — is appealing. In fact, GSK’s defensive properties could make it a great option if markets lurch south in the near future. Despite confirmation of a dividend cut, shares should also yield 4.2% next year (based on the current share price).

FTSE 100 oil giant

Oil major Royal Dutch Shell (LSE: RDSB) is a third stock I’ll be watching closely, especially after all the fuel-shortage shenanigans we’ve seen recently. Third-quarter numbers are expected a day after those of GSK.

As I type, RDSB shares trade on nine times forecast earnings. That’s not a bargain relative to the industry. FTSE 100 peer BP, for example, trades on a lower multiple. Nevertheless, Shell does look inexpensive compared to the general market. The 3.8% dividend yield is also higher than that of the FTSE 100 (3.5%).

There are risks, of course. The oil price can be notoriously volatile, even though analysts are bullish on demand for the rest of 2021. The switch in focus to producing greener sources of energy won’t come overnight either. Nor will it be cheap to accomplish.

As things stand, I’m content to sit on the sidelines. Considering its ability to move the FTSE 100 however, I’ll be taking a keen interest in next month’s news.

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 still 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 is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. 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.