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.

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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 BT 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 BT 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 BT shares today?

Before you decide, please take a moment to review this first.

Because my colleague Mark Rogers – The Motley Fool UK’s Director of Investing – has released this special report.

It’s called ‘5 Stocks for Trying to Build Wealth After 50’.

And it’s yours, free.

Of course, the decade ahead looks hazardous. What with inflation recently hitting 40-year highs, a ‘cost of living crisis’ and threat of a new Cold War, knowing where to invest has never been trickier.

And yet, despite the UK stock market recently hitting a new all-time high, Mark and his team think many shares still trade at a substantial discount, offering savvy investors plenty of potential opportunities to strike.

That’s why now could be an ideal time to secure this valuable investment research.

Mark’s ‘Foolish’ analysts have scoured the markets low and high.

This special report reveals 5 of his favourite long-term ‘Buys’.

Please, don’t make any big decisions before seeing them.

Claim your free copy 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.

Like buying £1 for 51p

This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

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