The FTSE 100’s trading near a 52-week high! I’m still looking to buy

The FTSE 100’s slowly making its way towards record highs, but there are still dirt cheap buying opportunities to discover in unpopular sectors right now.

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After delivering double-digit total returns over the last 12 months, the FTSE 100‘s been on quite an impressive run. And while the UK’s flagship large-cap index has pulled back slightly in recent weeks, it’s still trading towards the upper end of its 52-week range.

Stocks can’t go up forever. And seeing some pullback’s hardly a surprise. Nevertheless, even after its impressive run, there continues to be some terrific buying opportunities for investors to capitalise on right now. That’s why I’m still hunting for stocks to buy, even as the UK stock market reaches new record highs.

Finding bargain stocks

One of the best-performing UK sectors in 2024 so far has been banking. The rise of interest rates has helped restore the profit margins on business and personal loans. And even though rates have started to be cut by the Bank of England, the resurgence of positive sentiment in the financial markets enabled investing divisions to thrive.

Should you invest £1,000 in Smith & Nephew Plc right now?

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With that in mind, it’s not a shock to see banks like Barclays skyrocketing almost 70% since the start of the year. It’s a similar story with NatWest Group, climbing even faster by almost 80% over the same period. And when venturing outside the FTSE 100, Metro Bank‘s putting everyone to shame with a near-130% gain!

With such explosive returns, these banks have become popular portfolio additions in 2024. However, while there continues to be promising long-term potential, I’m sceptical that these are the best buying opportunities right now. After all, the cheap shares are usually the companies that most investors aren’t paying attention to.

Therefore, I’m interested in one particular sector that seems to have fallen completely out of fashion this year – electronics.

Electronic rebound

As inflation climbed worldwide and the cost-of-living crises emerged, demand for consumer electronic devices such as TVs, smartphones, and even electric vehicles (EVs) took quite a tumble. And when paired with inventory overstocking by manufacturers, RS Group (LSE:RS1) saw its revenue and earnings take a heavy hit.

With growth evaporating, the distributor of manufacturing components, including electronics, saw its share price tumble almost 40% since 2022. Obviously, that’s frustrating to see, especially for shareholders. However, looking at some macroeconomic trends, this may soon be set to change.

The manufacturing PMI – the index that tracks global manufacturing demand – has been slowly shifting back toward a surplus. And as of the start of November, it’s sitting just under the threshold that signals a return to growth. In other words, the wind appears to be shifting for RS Group. And yet, so far, the market doesn’t appear to have noticed, creating a potential buying opportunity.

Of course, there’s no guarantee on the exact timing of when the electronics industry will make a full recovery, creating growth tailwinds for this business. And investors can’t ignore the threat of rival firms seeking to also capitalise on this hotly anticipated industry bounce back.

Nevertheless, given the firm’s track record, RS Group’s a business worthy of closer inspection, in my opinion. I’m researching it and think it’s worth considering.

Like buying £1 for 31p

This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p 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 10%, 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

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 Barclays Plc and Rs 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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