These 3 unbelievably cheap shares look like a golden buying opportunity for me

Harvey Jones is on the hunt for cheap shares and is impressed by the ultra-low valuations of these three FTSE 100 companies.

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I love buying cheap shares and there are some incredible FTSE 100 bargains out there right now. Especially these three.

Last Sunday (4 August), I noticed that the BP (LSE: BP) share price was at a 52-week low and I said it looked like the “bargain of the year!” 

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Great value?

The oil giant’s shares have fallen another 2.48% since then. They’re down 10.57% over 12 months and trade at just 6.26 times earnings. Better still, they yield 5.18%.

Created with Highcharts 11.4.3Bp P.l.c. PriceZoom1M3M6MYTD1Y5Y10YALL6 Apr 20203 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '252021202120222022202320232024202420252025100200300400500600www.fool.co.uk

Its profits and share price rocketed during the energy crisis. Yet as the oil price retreated they halved in FY23, from $27.2bn to $13.8bn.

BP continued to reward long-term shareholders, hiking the dividend 10% and buying back $7.9bn of shares. At £20.9bn, its net debt is at a 10-year low.

With Brent crude now below $80 a barrel, investors still don’t want to know. Others are wary as BP doubles down on fossil fuels, despite the net zero push. Energy stocks are cyclical and I think the time to buy BP is when it’s down rather than up. Global warming poses risks but I’ll buy it when I have the cash.

Talking about climate change, in July I flagged up Lloyds of London insurer Beazley (LSE: BEZ). As a speciality-risk insurance and reinsurance business it’ll pick up the tab from tomorrow’s floods, storms and hurricanes.

That partly explains why the share price is so cheap, trading at just 4.47 times trailing earnings. That’s despite its shares jumping 35.27% over 12 months, boosted by a 155% increase in 2023 pre-tax profits to a record $1.25bn.

Created with Highcharts 11.4.3Beazley Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Its good form continues as half-year results published on 8 August showed a record profit before tax of $728.9m, nearly double last year’s $366.4m. Beazley was last week’s best FTSE 100 performer up 12.53%.

NatWest Group is back

Its 1.96% yield is at the lower end, but that’s partly down to the booming share price. Another one to buy when I have the cash.

NatWest Group (LSE: NWG) is also on a roll. Its shares are the second-best-performing on the FTSE 100 over the last six months, up 58.4%. Only Darktrace has risen faster, up 68.2%. Over 12 months, NatWest is up 38.85%.

Created with Highcharts 11.4.3NatWest Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

The big banks are finally living up to their potential, and the NatWest share price is leading the charge. Yet it’s still astonishingly cheap, trading at 6.67 times earnings. The yield is also attractive at 5.11%.

Labour’s decision to abandon plans to sell the government’s remaining NatWest stake has lifted the stock, as there will be no cut price shares flooding the market.

Analysts at Berenberg have lifted their target price to 415p. Today, NatWest shares trade at 334p, so there’s a potential 25% uplift there.

It’s not all happy days though. First-half profits fell 15.6% to £3.03bn while net interest margins dropped 16 basis points to 2.07%. Margins may be squeezed further when interest rates are cut. Despite that, I’d still buy NatWest at today’s low valuation, if I hadn’t already gone big on the banking sector via Lloyds Banking Group.

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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 Phoenix Group Holdings Plc made the list?

See the 6 stocks

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.

Harvey Jones has positions in Lloyds Banking Group Plc. The Motley Fool UK has recommended Lloyds Banking Group 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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