Investors might consider October as a FTSE 100 entry point because history shows it often marks a turning point for stock markets. Despite its reputation for volatility — highlighted by episodes like Black Monday — October frequently acts as a “bear killer,” ending downward trends and kickstarting rallies.
Over the last 20 years, average market returns in October have been positive, typically outperforming September and often supporting gains heading into the winter months. With seasonality pushing returns higher after summer weakness, October could be a opportunity for long-term UK investors seeking to benefit from historical patterns of recovery and market strength.
Melrose Industries
Melrose Industries (LSE:MRO) is a FTSE 100 favourite of mine and certainly one to consider in October. The aerospace and defence group delivered a strong first-half 2025 performance, surprising the market with a 29% rise in adjusted operating profit to £310m.
Building on this, the firm reported that margins expanded to 18% from 14.2% a year earlier, while revenue reached £1.72bn on a like-for-like basis. Engines grew 11% and Structures 3%, showing resilience despite ongoing supply chain and tariff pressures.
The median 12-month target price of 663p suggests more growth potential. But analysts may have been slow to catch up and the valuation looks very attractive.
Management is targeting annual earnings growth above 20% through 2029, yet the stock trades on a forward price-to-earnings (P/E) of just 15.5, with a strong P/E-to-growth ratio under one — in contrast, Rolls-Royce trades at 40 times.
Like Rolls, Melrose has a great economic moat, with 70% of sales coming from sole-source positions. Of course, risks remain, including labour shortages, supply chain bottlenecks, and currency shifts. For investors seeking long-term UK exposure, Melrose deserves attention this October.
London Stock Exchange Group
Analysts’ consensus on London Stock Exchange Group (LSE:LSEG) is unusually strong, with 17 analysts rating the stock a Buy or Outperform (10 Buys, 7 Outperforms) and no Holds or Sells. The average target price of 12,437p is 52% above the current share price, with a range from 11,200p (+37%) to 13,500p (+65%).
On an adjusted basis, EPS forecasts stand at 399p for the year ahead and 442p for 2026. That equates to forward P/E ratios of 20.5 times and 18.5 times respectively. That’s quite compelling given the group’s recurring revenue base, strong margins, and structural growth drivers.
Despite this, the shares have lagged in 2025, reflecting frustration that the company has yet to deliver notable AI-driven product breakthroughs, despite its much-publicised Microsoft tie-up. Investors are looking for evidence that AI integration can materially enhance its data analytics, terminal offerings, and client workflows. That could be on the way.
Risks remain, particularly the threat of market-share erosion to Bloomberg and other rivals, where competition is fierce and sticky client relationships are vital. Also, management needs to deal with platform migration and regulatory compliance, which could bring challenges.
Even so, I think London Stock Exchange Group looks like a high-quality FTSE 100 stock to consider this October. There’s lots to be positive about.
