1 big-cap stock I’d consider buying with the FTSE 100 around 8,000

With several contenders it’s been a tough choice. But here are my top FTSE 100 stock picks, despite the buoyant index that’s pushed up prices.

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With the FTSE 100 around 8,000, is it too late to buy UK big-cap shares?

My short answer is no. The aggregated index has little to do with individual company valuations and prospects for earnings.

My top stocks to consider

Several Footsie stocks look appealing to me right now, such as packaging and paper solutions provider Mondi.

The trend away from plastic packaging to sustainable alternatives like paper and cardboard is helping the sector to flourish. However, Mondi isn’t the only operator in the space, so it’s worth keeping an eye on the competitive pressures faced by the business.

I also like Coca-Cola products bottler and distributor Coca-Cola HBC. For me, it’s all about the iron-clad brand strength with this one and how that has enabled impressive dividend growth.

The company has rights to distribute the famous brand in a territory that spans from Ireland, across Central & Eastern Europe, and as far south as Nigeria. 

The firm does bottle and sell other drinks too, but perhaps the worst thing that could happen is a disagreement with The Coca-Cola Company and a loss of the licence. However, there’s no sign of that catastrophe scenario at the moment. 

Bullish on the economy

Another on my radar is Kingfisher, owner and operator of the B&Q and Screwfix brands among others in Europe.

My liking for this stock occurs because I’m optimistic about the prospects for the economy and consumer finances. Meanwhile, the share price is well down from its multi-year high:

However, the chart tells the story of the cyclicality in the business, and that’s still the biggest risk. If the economy doesn’t flourish as hoped, this stock could still lose money for its shareholders.

They are all tempting stocks and well worth further and deeper research. But my top choice is Marks & Spencer (LSE: MKS).

This is another play on general economic recovery, but it’s also a company engaged in what’s proving to be a successful turnaround of its business.

A turnaround that’s turning

For years, M&S appeared to have lost its way. Turnaround plans came around with depressing regularity but always seemed to amount to little. However, that’s changed, as the share price chart shows:

It helps that a lot of the firm’s competition has gone to the wall in recent years, at least in the high street. But on top of that, there’s been a gathering movement of consumers being less enthusiastic about pure online shopping for clothing and many other products.

The new hot strategy is hybrid retailing, where outlets on the ground back up a firm’s online offerings.

It makes sense. Most people like to poke, prod, try on and assess a product in the flesh before buying.

With the share price near 261p (26 April), the forward-looking price-to-earnings (P/E) rating is just above 10 for the current trading year to March 2025. That looks undemanding, to me, given that City analysts predict an earnings advance of almost 9%.

An investment in M&S today could go wrong if the directors lose their way again as has happened before. There’s also the ever-present threat of a cyclical downturn hitting the sector.

Nevertheless, I see the stock as one worth looking at now with a view to adding it to a diversified portfolio.

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.

Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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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