I believe now’s a great time for fans of value stocks to go shopping. Stacks of quality shares from the FTSE 100 index down continue to fall as worries over the global economy mount.
The FTSE index has slumped 6% so far in August. And on Friday, it came close to closing at nine-month lows, at 7,262.43 points. This provides a terrific dip-buying opportunity for savvy long-term investors.
3 FTSE shares I’d like to buy
Disappointing economic data from China continues to rattle market nerves. As the occasionally changed saying now goes: “When China sneezes, the world catches a cold“. So panicked investors are selling up as companies’ profit forecasts come under rising scrutiny.
But I don’t buy shares to hold for a year or two. I invest in companies I intend to own for a decade, perhaps even longer. This gives my portfolio more time to grow, thanks to the miracle of compound interest.
With this in mind, here are three top FTSE 100 shares I’d love to buy in September.
1. WPP
Tough conditions in the global advertising market is a challenge to agencies like WPP. Indeed, the company recently cut its revenues forecasts owing to difficulties in the US tech sector.
But I believe its growing focus on digital advertising will provide healthy returns over the longer term. This area of the market is growing rapidly as technology gradually takes over our lives (Statista thinks the digital segment will grow around 7.6% each year to 2027).
I also like the firm’s large exposure to fast-growing emerging markets. And I believe a low price-to-earnings (P/E) ratio of 7.7 times for 2023 makes it very attractive today.
2. Prudential
A steady flow of disappointing data from China is especially concerning for Prudential investors like me. Following its split from M&G four years ago, it’s dependent on strong economic conditions in Asia.
Having said that, the long-term earnings outlook remains solid, in my opinion. And with the company trading on a forward-looking P/E ratio of 11.3 times I’m considering increasing my stake.
Low product penetration and soaring personal wealth levels could supercharge sales here during the next 30 years. Swiss Re estimates the life insurance market penetration in Asia sits at just 2.8%. The Pru has the brand recognition to make the most of this opportunity too.
3. SSE
I also like the look of green energy producer SSE today. It trades on a prospective P/E ratio of 10.4 times. In addition, its corresponding dividend yield of 3.8% beats the FTSE 100 average.
Keeping wind turbines running is an expensive business. And large unexpected costs could become more common as extreme weather patterns increase. But soaring demand for clean energy means profits here should surge over the next decade.
SSE is turbocharging capacity to meet growing demand for green power. It plans to increase power output fivefold by the end of the decade. I think this is another top stock to buy for the long term.
