Despite its surge to record highs, the FTSE 100 remains jam-packed with brilliant bargain shares. Here are two I think demand serious consideration from value investors.
Going for gold
Choppy gold prices have caused investors to reevaluate the investment potential of precious metals stocks. Bullion values are still up 73% on a 12-month basis. But they could drop sharply again if profit taking resumes, driving gold shares lower again.
On balance, though, I’m optimistic the yellow metal’s multi-year bull run remains intact. As a result, I think miners like Fresnillo (LSE:FRES) will keep on climbing.
Research late last week from the World Gold Council (WGC) have fed my optimism. It showed global gold-backed exchange-traded funds (ETFs) attract inflows of $19bn in January, the highest monthly total in history.
While impressive, that wasn’t my key takeaway. I was more encouraged by the WGC’s comments that “even with the recent price decline, all regions except Europe saw net inflows on both 30 January and 2 February, as investors appeared to take advantage of the dip to add exposure to gold.”
This reflects the strength of underlying demand for the yellow metal. I’m expecting key drivers like a declining US dollar, falling interest rates, rising geopolitical tensions, and growing worries over an AI bubble to keep feeding demand for the safe-haven asset.
Investing in mining stocks over gold itself carries higher risk, reflecting the unpredictable nature of metal excavation. But it can also lead to far greater rewards — Fresnillo’s share price is up 387% over the last year, comfortably outpacing the gold price.
Yet Fresnillo shares still look cheap at £36.94. City analysts think earnings will soar 75% in 2026, leaving it trading on a price-to-earnings (PEG) ratio of 0.2. Any reading below one indicates a share trading below value. I think it’s a top share to consider following recent price volatility.
Another FTSE 100 bargain
Prudential (LSE:PRU) shares have risen even more sharply than the FTSE 100 in recent times. Up 73% since this time last year, they’ve comfortably outpaced the broader Footsie‘s 18% rise.
Yet years of underperformance prior to 2025 mean the life insurer still looks very cheap on paper. City analysts think The Pru’s earnings will soar 14% this calendar year. This leave it on a forward PEG ratio of 0.9.
That’s not all — a predicted 15% bottom-line rise in 15% in 2027 leaves a PEG of 0.8 for next year.
Why is Prudential’s share price surging right now, though? It essentially comes down to improving investor sentiment towards Asian economies, which are now beginning to pick up after a post-Covid slump.
Prudential’s a major player across Asia Pacific, and has a presence in the region’s economic hotspots like China, Hong Kong and Singapore. It faces significant competitive pressures, but the opportunities for it to supercharge profits are huge
Deloitte predicts Asia’s life insurance market to grow a healthy 5.3% a year to 2053, driven by exploding wealth levels and population sizes. Latest financials showed Prudential grew new business profits 13% in Q3. I expect the FTSE firm to keep delivering, helped by its strong brand and operational expansion.
