I’m searching the FTSE 100 and FTSE 250 for the best value stocks that money can buy. Here are three I’ll be looking to add to my portfolio when I have extra cash to invest.
GSK
Failure at the lab bench can play havoc with drugs developers’ profits. Yet a growing global population and rising healthcare spending in developing countries provide a wealth of opportunities for such businesses.
FTSE 100 share GSK (LSE:GSK) is one such on my radar. It has a phenomenal track record of getting its products past regulators and onto pharmacy shelves. And it’s investing heavily in fast-growing therapy areas like vaccines, oncology and respiratory to give earnings an additional boost.
The company’s sale of $804m worth of Haleon shares late last week gives GSK’s shares extra appeal, too. The extra funds give it additional financial firepower to invest in its product pipeline. They also give it more balance sheet strength to pay decent dividends to its shareholders.
Today GSK’s share price commands a forward price-to-earnings (P/E) ratio of 10 times. They also carry a healthy 3.8% prospective dividend yield, proving attractive all-round value.
NCC Group
IT services businesses like NCC Group (LSE:NCC) haven’t had the best of times more recently. This UK share — an expert in the field of cyber security — cut its profit forecasts just over a month ago chiefly due to trouble in North America.
Tech sector troubles have caused clients to cancel or delay buying decisions, the firm said, while further interest rate rises had also sapped customer appetite. The collapse of Silicon Valley Bank had damaged tech market confidence and thus project spending, too.
But I believe these troubles are baked into NCC’s low share price. For the year to May 2024 the FTSE 250 firm trades on a P/E ratio of just 8 times.
As a long-term investor I find its shares highly attractive at current prices. Fixing cyber attacks is an expensive business (outsourcing giant Capita recently said that a security breach could cost it £20m). And the threat from hackers is steadily growing as the world becomes increasingly digitalised. I expect NCC to recover strongly from its current troubles.
TBC Bank Group
I’ve long had my eye on TBC Bank Group (LSE:TBCG) shares. I feel the company’s leading position in Georgia’s fast-growing banking industry could deliver exceptional returns. And following this week’s sizzling market update I’m considering finally adding it to my portfolio.
Net interest income and pre-tax profit soared 27% and 19% respectively in the first quarter. This was driven by rapid growth in the Georgian economy (7.2% during the period) and a jump in customer numbers (up 42% year on year to 14.8m).
Okay, banks are highly cyclical and growth at TBC could stall if the global economy encounters a fresh crisis. Yet in my opinion the FTSE 250 firm’s low valuation still makes it a top-class value stock to buy.
Today it trades on a forward P/E ratio of 3.9 times. It also sports a terrific 8.2% prospective dividend yield.
