Looking for cheap FTSE 100 stocks? Here’s one I’d feel confident going ‘all in’ on

This soft drinks giant has been one of the FTSE 100’s best value stocks for a long time. Here’s why I’m hoping to increase my stake in the near future.

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The FTSE 100 is on a roll as demand for UK-listed stocks picks up. The index is up 5.3% since the beginning of 2024, and on Tuesday hit new record highs near 8,200 points.

It’s been said for quite some time that British shares are undervalued. It’s a view that I myself share. And it seems like investors could also be coming around to this idea.

Analyst Russ Mould of AJ Bell says that “the breadth of sectors moving higher suggests investor sentiment continues to improve.” Meanwhile, XTB analyst Kathleen Brooks believes there is “a psychological shift going on in the mind of international investors, and they are starting to warm to UK stocks.”

A FTSE 100 bargain

This could be the start of a new bull run for FTSE 100 shares. And I’m looking for stocks that are trading below value to hopefully capitalise on this. They could potentially deliver the greatest share price gains as the market recovers.

There are plenty of undervalued shares to choose from today. But one particular company has my attention right now: drinks bottler Coca-Cola HBC (LSE:CCH).

The Footsie firm is expected to grow earnings 25% in 2024. So at £26 per share, it trades on a forward price-to-earnings growth (PEG) ratio of 0.6.

Any reading below 1 indicates that a share is trading too cheaply.

Buying just one or two shares isn’t a wise move. Diversification is critical in order to reduce risk for investors. However, if I were to go all-in and invest all my cash in just one blue-chip company, this would be my top choice.

S.W.A.N.

Coca-Cola HBC is, in my opinion, one of the Footsie’s greatest ‘S.W.A.N.’ (or ‘Sleep Well At Night’) stocks. It’s a stable, reliable, and low-risk investment with a long history of delivering consistent returns.

Investing in any stock comes with risk. With this particular share, intense competition from heavyweight rivals like PepsiCo, Dr Pepper Snapple and Britvic is a constant thorn in the side. It also has to keep a close eye on costs in order to keep growing earnings.

But the Coke, Sprite and Fanta bottler is still an ultra-stable stock to buy. This is thanks to:

  • A vast portfolio of popular brands.
  • Its exposure to multiple product categories (like soft drinks, coffee, water and energy drinks).
  • A wide geographic footprint spanning 29 countries in Europe and Africa.
  • Its serving of various customer segments like supermarkets, vending machines and hospitality venues.

All this means that it should continue to grow earnings regardless of tough economic conditions and problems in certain markets or categories.

A top stock to buy

This was underlined in first-quarter results released this week. Organic revenues surged 12.6% between January and March, Coca-Cola HBC announced, as it successfully raised prices on its high-demand drinks to drive sales.

Breakneck growth in its emerging and developing regions made up for more modest growth in its established territories. Meanwhile, soaring demand for coffee and energy drinks offset flat sales in its sparkling drinks category.

Here we can see the tremendous value of the company’s diversified business model.

I don’t think Coca-Cola HBC’s track record is reflected in the cheapness of its shares. If I was to buy just one undervalued FTSE 100 share today this would be it.

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.

Royston Wild has positions in Coca-Cola Hbc Ag. The Motley Fool UK has recommended Aj Bell Plc and Britvic 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.

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