2 no-brainer FTSE 100 shares to buy now

This Fool explains why he thinks these blue-chip stocks in the FTSE 100 are some of the best shares to buy now.

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When looking for shares to buy now, I like to concentrate on what I think are the most undervalued opportunities in the FTSE 100 and beyond. 

These are not necessarily the cheapest stocks. I am happy to pay a bit more for a company if I am excited by its growth potential over the next few years. 

One such company is Asia-focused insurance group Prudential (LSE: PRU)

One of the best shares to buy now 

Over the past few years, this company has divested both its UK and US businesses. It is now predominantly focused on its Asian markets, where I think there is substantial growth potential. 

Unlike the UK and the US, which have fairly well-developed financial services markets, Asian markets are still relatively underdeveloped. The level of general insurance penetration in Asia, for example, is just 2.7% of GDP compared to 7.5% in the UK

Prudential has had a presence in Hong Kong and other Asian markets for many years, so it is a trusted brand in the region. And by selling off the UK and US divisions, management can now concentrate on the faster-growth business. 

These are the reasons why I reckon the stock is a no-brainer buy today. City analysts have pencilled in net income of $3.4bn for the group in 2022, up from $2.1bn in 2020. Of course, these are just projections at this stage, but I think they show Prudential’s potential. 

The stock is selling at a forward price-to-earnings (P/E) multiple of 18, which seems cheap compared to its potential. Considering all of the above, I would buy Prudential for my portfolio today. 

But some challenges the group may face in the future include competition, higher interest rates, and regulation. All of these factors could cause growth rates to disappoint. 

FTSE 100 growth 

As well as Prudential, I would also buy Mondi (LSE: MNDI) today. 

The paper and packing group has fallen out of favour with the market recently. However, its fundamental performance has improved since the beginning of the year. 

The firm reported a 27% jump in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for the third quarter. Robust demand for corrugated packaging allowed the company to hike prices on top of increased volumes. 

As the global e-commerce space continues to expand, I think the demand for packaging will only continue to increase. As one of the most prominent players in the sector, Mondi has the economies of scale and connections required to capitalise on this market growth. 

It seems as if management also agrees. The group’s chairman recently forked out £100,000 to top up his stake in the enterprise. With the shares trading at a P/E of 15.1, it looks as if he was taking advantage of depressed market sentiment towards the business to snap up some stock at a discounted price. 

Unfortunately, even though the company appears well-placed to capitalise on the tight market for packaging, it is not immune to the challenges affecting the rest of the sector. Increasing commodity prices and wage inflation could hurt profit margins over the next year or so. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Prudential. 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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