The FTSE 100 could skyrocket to 10,000! 1 cheap stock I’d buy before the surge

New forecasts predict more double-digit growth for the FTSE 100 over the next 12 months! Now may be the perfect time to start buying cheap stocks.

| 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.

The FTSE 100‘s been on a terrific run in 2024. Since January, the UK’s flagship index has generated a 10% total return for investors, exceeding the 6% average that it’s usually generated over the last decade.

Seeing the stock market rally following a prolonged period of decline is hardly a surprise. After all, that’s exactly what’s happened for centuries. Yet, with the catalyst of both interest rate cuts as well as the return of GDP growth, forecasts for 2025 are looking quite bullish.

Analysts from The Economy Forecast Agency now expect the FTSE 100 to potentially surpass the coveted 10,000 point threshold by as early as October next year. In other words, the index could be set to enjoy another double-digit jump over the next 12 months.

Should you invest £1,000 in Unilever 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 Unilever made the list?

See the 6 stocks

Forecasts always need to be taken with a pinch of salt. But they’re still a handy tool for judging investor sentiment. So let’s assume these latest predictions of a further market rally are true. Which stocks should investors buy to capitalise on this opportunity?

Finding the best stocks

The FTSE 100 might be up by 10%, but plenty of its constituents are up considerably more. The spectacular turnaround Rolls-Royce has delivered is close to 80% gains. Meanwhile, Barclays has surged closer to 50% over the same period.

Yet when finding the best stocks to buy right now, my attention isn’t drawn to the winners, but rather the losers. In many cases, when a company falls from grace, it’s for a good reason. However, occasionally, panicking investors who are overly focused on short-term challenges end up creating long-term buying opportunities. And that’s what’s brought B&M European Value Retail (LSE:BME) onto my radar.

Created with Highcharts 11.4.3B&M European Value PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

A discount retailer at a discounted price

With inflation ravaging households, B&M has had little trouble attracting customers to its stores. However, now that economic conditions have significantly improved, it seems many shoppers are returning to their usual supermarket destinations.

As such, B&M’s latest results were a bit lacklustre in terms of growth. Tough comparables paired with a seeming lack of customer stickiness aren’t a great combo. So it’s no surprise to see shares of this FTSE 100 stock take a 26% tumble since the start of the year.

However, this sell-off seems to have been overblown. While sales are slowing, some normalisation was to be expected after such a terrific trading period. At the same time, international operations in France are still delivering solid results as the highest growth segment in the business – a trend that’s expected to continue.

In other words, while B&M’s undoubtedly having some short-term growth pains, the long-term potential of this business remains fundamentally sound, in my eyes. So with shares trading at a price-to-earnings ratio of 11.4 versus the industry average of 18, it seems a buying opportunity’s emerged. That’s why I’m planning to use the recent volatility to snap up some shares for my portfolio before the stock market rally, once I have more capital at hand.

Should you buy Unilever now?

Don’t make any big decisions yet.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.

And he believes they could bring spectacular returns over the next decade.

Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows...

When such enormous changes hit a big industry, informed investors can potentially get rich.

So, with his new report, Mark’s aiming to put more investors in this enviable position.

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

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.

Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended B&M European Value. 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.

Our best passive income stock ideas

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

More on Investing Articles

artificial intelligence investing algorithms
Investing Articles

Up 272% in just a year, is Palantir stock just getting started?

This writer recognises that Palantir has grown its business very well -- but does the stock price offer him an…

Read more »

Runner standing at the starting point with 2025 year for starting in new year 2025 to achieve business planing and success concept.
Investing Articles

Up 50%? The Aston Martin share price forecast is mind-blowing! 

If analysts are right, the Aston Aston Martin share price could absolutely rocket in the year ahead. Harvey Jones says…

Read more »

Investing Articles

As the S&P 500 drops, here are 2 Stocks and Shares ISA holdings I’m watching

Our writer has different views on how President Trump's tariffs might affect these two US holdings in his Stocks and…

Read more »

Surprised Black girl holding teddy bear toy on Christmas
Investing Articles

£10,000 invested in Tesla stock at Christmas is now worth…

Tesla stock has been one of best-performing investments of the past decade. But things haven't gone to plan for investors…

Read more »

Investing Articles

Up 279% in 5 years, could Meta stock keep soaring?

Meta stock has more than tripled in five years. This writer sees lots to like about the business but also…

Read more »

Pink 3D image of the numbers '2025' growing in size
Investing Articles

25% total return in a year? Is now the perfect time to buy BP shares?

BP shares are on the front line of today's global economic and political uncertainty but analysts think they can still…

Read more »

Affectionate Asian senior mother and daughter using smartphone together at home, smiling joyfully
Investing Articles

With Cash ISA changes coming, could now be the time to consider buying shares?

Changes to the Cash ISA could lead to greater investment in the stock market. This could be a good thing…

Read more »

Investing Articles

These FTSE 100 dividend shares just got cheaper, thanks to President Trump!

Investors buying dividend shares can lock in bigger long-term yields when share prices take a tumble. These two just did…

Read more »