These 2 top-notch value stocks have fallen by over 10% this year!

Value stocks have the potential to offer meaty returns over the long run. Here are two this Fool thinks are worth considering today.

| 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.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

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.

Plenty of stocks look like excellent value at the moment. But with UK shares heating up, this might not be the case for much longer.

Here are two brilliant picks I reckon investors should consider buying this month.

JD Sports Fashion

My first selection is JD Sports Fashion (LSE: JD.). There’s no sugarcoating it, the stock has put up an incredibly underwhelming performance this year. It’s down 30.1% year to date and 51.9% from its five-year high.

Should you invest £1,000 in Rolls-Royce right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Rolls-Royce made the list?

See the 6 stocks

Created with Highcharts 11.4.3JD Sports Fashion PriceZoom1M3M6MYTD1Y5Y10YALL6 Apr 20204 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '25202120212022202220232023202420242025202550100150200250www.fool.co.uk

But for contrarian investors who like to sniff out value, I reckon JD is one to consider. With its decline, it now looks cheap as chips, trading on 10.7 times earnings. As the chart shows below, it’s trading on just 9.6 times forward earnings.


Created with TradingView

It has issued a couple of profit warnings in recent times and that has spooked investors, hence its cheap price. Consumers are still tightening their purse strings, so it may be the case that we see JD struggle for a bit longer as tougher trading conditions persist.

That means I could hold out and try and buy at the bottom. But as the old adage goes, time in the market is better than timing the market. I see plenty of value in JD shares today. I think it would be too risky to try and wait for the stock to bottom out.

Zooming out, I see plenty of reasons to like JD. It functions in the athleisure sector, which is predicted to grow at an annual compound growth rate of 9.3% until 2030.  And despite an already strong position in the market, the business continues to expand. It opened 216 new stores last year.

Analysts have a whopping 160.2p 12-month target price for the stock. That’s a massive 42.9% premium from its current price. While those, of course, are just predictions, I think they highlight just how much potential JD has.

Rio Tinto

Next under the microscope is Rio Tinto (LSE: RIO). The FTSE 100 stalwart is down 11.6% so far this year. That said, it’s up 6.9% in the last 12 months.

Created with Highcharts 11.4.3Rio Tinto Group PriceZoom1M3M6MYTD1Y5Y10YALL6 Apr 20204 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '2520212021202220222023202320242024202520253k4k5k6k7kwww.fool.co.uk

Its fall in 2024 means the stock is trading on 10.8 times earnings, below the Footsie average. As seen below, it’s trading on just eight times forward earnings.


Created with TradingView

I think that’s cracking value for a business of Rio Tinto’s nature. I’m bullish on the moves it’s making as it expands further into the lithium sector. That includes its £825m acquisition of the Rincon lithium project a few years back.

Its cheaper price also means its dividend yield has been boosted. It sports a 6.6% yield, placing it inside the top 10 of the Footsie’s highest payouts. What’s more, it has consistently paid a dividend for over a decade.

The stock is cyclical. So, we may experience a few more blips like the one that has occurred this year. Around half of its sales derive from China, which can also provide complications.

But for the long term, I think Rio Tinto could be a savvy buy at its current price. Chinese demand has slowed but we’re seeing signs of it picking up again.

Analysts have a £61.64 12-month price target. That’s an 18.4% increase from where it is today.

AI Revolution Awaits: Uncover Top Stock Picks for Massive Potential Gains!

Buckle up because we're about to dive headfirst into the electrifying world of AI.

Imagine this: you make a single savvy investment in some cutting-edge technology, then kick back and watch as it revolutionises entire industries and potentially even lines your pockets.

If the mere thought of riding this AI wave excites you and the prospect of massive potential returns gets your pulse racing, then you’ve got to check out this Motley Fool Share Advisor report – 'AI Front Runners: 3 Surprising Stocks Riding The AI Wave’!

And here’s the kicker – we’re giving you an exclusive peek at ONE of these top AI stock picks, absolutely free! How’s that for a bit of brilliance?

Get your free AI stock pick

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 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.

More on Investing Articles

Investing Articles

Prediction: 12 months from now, £5,000 invested in Tesla stock could be worth…

Tesla stock has endured a miserable year so far, falling by 29%. Muhammad Cheema takes a look at how it…

Read more »

Investing Articles

See what £10,000 invested in Tesla shares at their mid-December peak is worth today 

As the world absorbs the full scale of Donald Trump's tariffs, Tesla shares are reeling. Investors who bought the stock…

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Dividend Shares

2 ‘safe’ LSE dividend stocks to consider as global markets sell off

As global markets experience high levels of volatility due to economic uncertainty, investors are piling into these ‘safe-haven’ dividend stocks.

Read more »

Investing Articles

US stock market rout: an unmissable opportunity for investors?

His tech-heavy portfolio has been smashed by Trump’s tariffs. However, Dr James Fox believes there could be some opportunities in…

Read more »

Investing Articles

After a 13% ‘Trump tariff’ fall, is the Barclays share price too cheap to miss?

Does the Barclays share price fall mean we should all panic and run screaming from the stock market? Nah, of…

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

2 investment trusts to consider for a Stocks and Shares ISA

These two investment trusts have a different focus -- but our writer sees both as worth considering, one more for…

Read more »

Investing Articles

Deutsche Bank reiterates Buy rating on 9.6% yielding FTSE 250 stock that was “most shorted in UK”

Our writer investigates why a major broker remains optimistic about a FTSE 250 stock that was once the most shorted…

Read more »

Investing Articles

2 things to remember when stock markets are turbulent

US trade policy has rattled the stock markets in New York, London and elsewhere. Our writer outlines a couple of…

Read more »