After reaching another record high, are there still bargains on the FTSE 100?

As the FTSE 100 continues to surge, are there still opportunities available for investors to pick up bargains? This Fool certainly thinks so.

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The FTSE 100 has soared this year. So far in 2024, it’s risen an impressive 8.2%. Yesterday (8 May) saw it close at another record high of 8,354.1 points.

That’s a welcome change. For years, the Footsie’s underperformed. In all fairness, the pandemic and the hangover that followed didn’t help. But even so, UK shares have lagged their US counterparts for a while.

Nevertheless, it seems like things could be changing. The index is on the rise and UK-listed companies seem to be back in fashion. However, that does beg the question, are there still bargains on the FTSE 100?

Severely undervalued

To put it simply, yes. I think the index is still full to the brim with undervalued shares that investors should consider buying.

Today, the Footsie trades on an average of 11 times earnings. Its historical long-term average is closer to the 14-15 mark.

Of course, we still face challenges. While it looks highly likely interest rates will be cut this year, there’s no certainty. Inflation’s falling closer to the government’s 2% target, but it’s still not there just yet.

But a few speed bumps along the way won’t distract me from the fact that I see plenty of undervalued companies out there that can be bought today and held for the long term.

I’ve broadcasted my bullishness on the UK market recently. I reckon in the years to come we could see plenty of stocks soar. That’s why I plan to snap up undervalued shares before they take off.

Time to go shopping

Use Barclays (LSE: BARC) as an example. Its share price has risen 36.3% so far this year, outpacing the FTSE 100. But trading on just 8.2 times earnings, it looks cheap. That’s a mismatch I want to make the most of.

At its current price, the stock’s trading on just over four times earnings for 2026. As such, I reckon it has plenty more to give. For that reason, I recently increased my position in the Blue Eagle Bank.

I’m expecting volatility. As I highlighted, 2024 will be choppy for the banking sector. Banks have benefitted from higher interest rates, which have boosted margins. But with rates set to fall, this will come to an end.

But as a long-term investment, I’m bullish on Barclays. I like the direction the bank’s heading in, especially after announcing plans for a strategic overhaul, involving a streamlining and efficiency drive.

It plans to save £2bn in costs by 2026. Its Q1 results highlighted the positive strides it has already made to achieving this.

What’s more, I like its shares because they provide passive income through its 3.8% dividend yield. Over the next three years, the business has committed to return £10bn to shareholders via dividends and share buybacks.

Plenty of opportunities

Barclays is just one example of the bargains that exist on the FTSE 100 despite it continuing to rise. If I had the cash, I’d buy some shares today.

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.

Charlie Keough has positions in Barclays Plc. The Motley Fool UK has recommended Barclays 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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