These FTSE 100 shares are near 52-week lows. I’d buy all of them!

Our writer picks out three battered FTSE 100 (INDEXFTSE:UKX) stocks he’d snap up before the next bull market arrives.

| More on:

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.

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Some FTSE 100 shares have rocketed in the past year while other arguably far-better businesses have struggled. Personally, I see this as a huge opportunity.

Here are three of the latter that I’d buy without hesitation if I had the money to invest.

Diageo

Shares in premium drinks firm Diageo (LSE: DGE) are down 14% over the last year and now trade barely above the 52-week low hit in early July.

To some extent, this is understandable. The tragic loss of long-running CEO Ivan Menezes coupled with cost pressures have combined to unnerve some investors. Even a recent beat of full-year sales forecasts hasn’t been enough to raise spirits.

But let there be no confusion. Strong capital gains and consistent (and consistently rising) dividends mean Diageo has been an absolute corker for owners over the long term.

As all Fools know, the past isn’t necessarily a guide to the future. So, research showing that the young folk of today aren’t quite as partial to alcohol as previous generations, for example, is a bit worrying. Then again, we know they are more willing to pay for premium brands when they do drink.

For this reason, I think Diageo shares should continue to deliver very decent returns.

Halma

A second FTSE 100 member I’d have no issue buying today would be life-saving technology firm Halma (LSE: HLMA).

At first glance, that’s pretty contrarian. The £8bn cap’s share price hasn’t recovered from the big market sell-off at the beginning of 2022.

Again, however, I see this as an opportunity for those blessed with a bit of patience. Tellingly, the shares are still up 52% over the last five years.

Let’s not forget that Halma has managed to grow its annual dividend by 5% or more for the last 44 years either. This is primarily due to a superbly executed strategy of buying other businesses specialising in products that are increasingly deemed mandatory by regulators.

Unfortunately, this reliability brings its own problems. Despite its poor showing over the last year and a half, Halma’s valuation — a price-to-earnings (P/E) ratio of 26 — still looks high relative to the market, albeit justifiably so.

That could come back to haunt new investors if we get another market meltdown and/or targets aren’t hit.

Still, I think this is a risk worth taking, so long as I’m nicely diversified elsewhere.

Scottish Mortgage Investment Trust

A final FTSE 100 share within touching distance of its 52-week low is one I’m already invested in: Scottish Mortgage Investment Trust (LSE: SMT).

Frustratingly, SMT shares remain under the cosh as investors continue to fret over various economic headwinds. To make matters worse, the revival in US tech stocks seen in 2023 has barely registered in the stock’s valuation.

So, why would I buy (more) today? There are two main reasons.

First, an eventual pause in interest rate hikes should push SMT shares to outpace the market because its portfolio is chock full of disruptive growth companies that are favoured in a “risk on” environment.

Second, the shares still trade at a discount to net assets. In other words, I’m being asked to pay a price lower than what the portfolio is estimated to be worth.

That rarely happens with this particular investment trust.

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 assessed. Consider taking independent financial advice.

Paul Summers owns shares in Scottish Mortgage Investment Trust. The Motley Fool UK has recommended Diageo Plc and Halma Plc. 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.

More on Investing Articles

Smart young brown businesswoman working from home on a laptop
Investing Articles

These 2 UK shares could help me reach £1,000,000 in my Stocks and Shares ISA

A FTSE 100 compounding machine and a FTSE 250 value stock are the UK shares Stephen Wright thinks could help…

Read more »

Middle-aged Caucasian woman deep in thought while looking out of the window
Investing Articles

If I’d invested £1,000 in Lloyds shares at the start of the year, here’s what I’d have now

The stock market is unmoved, but Stephen Wright thinks last year’s record profits might give Lloyds shares a long-term boost.

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

I’ll snap up shares in this growth stock in March if others don’t get there first

This Fool says shares in this growth stock are stable, full of profit, and might be undervalued. But there are…

Read more »

Rainbow foil balloon of the number two on pink background
Investing Articles

My 2 top energy investment trust picks for a passive income

I'm aiming to buy more of these investment trusts for a passive income and the reasonably stable energy sector returns…

Read more »

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

5.5% dividend yield! Shares like these could be great for my retirement

Oliver Rodzianko thinks this company with a stellar dividend yield could be very useful when looking for income from his…

Read more »

Investing Articles

Should I buy this FTSE 250 stock as it soars back to the FTSE 100?

This FTSE 250 stock has rallied following its pandemic woes. This Fool thinks now could be a good time to…

Read more »

Businessman use electronic pen writing rising colorful graph from 2023 to 2024 year of business planning and stock investment growth concept.
Investing Articles

How I’d aim to transform an empty Stocks & Shares ISA into £1m of wealth!

There's never a better time to start investing in a Stocks and Shares ISA than today. Here's how I'd aim…

Read more »

Close up of manual worker's equipment at construction site without people.
Investing Articles

Investing £14,708 in this FTSE 100 stock could earn me £1,000 per year in passive income

Is a CMA investigation into anticompetitive practices the cloud cover Stephen Wright needs to start buying shares in a FTSE…

Read more »