Share investors have just two weeks to make full use of their annual ISA allowance. The timing could be perfect, as recent stock market volatility leaves the FTSE 100 packed with brilliant bargains this ISA season.
Individuals don’t actually need to buy shares, trusts, or funds to max out their Stocks and Shares ISAs for the year. Just depositing cash into one of these tax-efficient accounts is enough. But with so many top cheap stocks out there, why wait?
Here are two top FTSE 100 shares to consider before the April 5 deadline. I think they offer exceptional value at today’s prices.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
Silver slumper
Precious metals miner Fresnillo (LSE:FRES) has slumped 15% over the last month as gold and silver prices have dropped. At £32.90 per share, it trades on a forward price-to-earnings-to-growth (PEG) ratio of 0.3.
Any reading below one indicates a share trading below value.
Bullion prices have dropped back below $5,000 per ounce as the US dollar has rallied. A more expensive buck makes holding assets like gold and silver less cost effective. The question is, will the precious metals boom of recent years resume? I think so.
The US dollar could continue to head northwards, of course. A prolonged Middle East conflict could significantly boost inflation, meaning the US Federal Reserve holds (or perhaps even raises) interest rates. But I’m confident the currency will trek lower again when the US’s enormous debt levels and volatile political landscape come back into focus.
This doesn’t necessarily mean gold and silver will rise. But adding in those rising inflationary pressures, an increasingly turbulent geopolitical backdrop, and growing fears over the global economy, I think conditions could be perfect for the metals to rebound.
I think Fresnillo could be a great share to buy to capitalise on this. As the world’s largest silver producer and a major gold supplier, it enjoys stable operational leverage which — as we’ve seen in recent years — can lead to outsized share price gains.
Another FTSE 100 faller
Barratt Redrow‘s (LSE:BTRW) share price has fallen an even more sizeable 25% over the past month. It leaves the builder trading at classic bargain-basement levels.
At 287.7p per share, the FTSE company trades on a price-to-book (P/B) ratio of 0.6. Like the PEG multiple, a reading below one suggests great value.
Barratt has slumped due to expectations of soaring inflation and its impact on interest rates. Mortgage lenders are already hiking their lending costs following the Middle East crisis — according to Moneyfacts, a typical new mortgage is now £788 more expensive per year than before the war began.
Homebuyer affordability could continue to worsen if the conflict carries on. But could Barratt Redrow be worth a close look from long-term investors? I think so.
I personally hold the FTSE 100 builder in my own portfolio. As Britain’s population rapidly grows, I expect demand for newbuild homes to similarly take off. And as the country’s largest housebuilder by volume, Barratt Redrow’s in the box seat to capitalise on this trend.
