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3 Of My Favourite FTSE 100 Stocks: Rio Tinto plc, Burberry Group plc And CRH PLC (UK)

In the long run, no company can perform exceptionally well all of the time. In fact, it is rare to find any business that does not come with a degree of cyclicality, with sales and earnings being higher at certain times of the year, or at certain points in the business cycle. As such, it makes sense to buy companies when they are enduring a more challenging period, since it means that their shares can often be purchased at a better price than if it were during a more optimum time in their operating cycle.

As such, Rio Tinto (LSE: RIO) (NYSE: RIO.US) appears to be well-worth buying at the present time. Certainly, it is enduring a rough patch, with its top and bottom lines coming under considerable pressure as a result of an iron ore price that is at or near to a ten-year low. And, in the short run, things could get worse before they get better for Rio Tinto, as a global supply/demand imbalance for the steel-making ingredient looks set to stay for a good while yet.

However, this means that Rio Tinto now offers superb value for money. Evidence of this can be seen in its dividend yield, which now stands at a whopping 5.7% and is well-covered by the company’s net profit. Furthermore, Rio Tinto is a top quality business and is among the most financially sound in the global mining sector, with a relatively low cost base, strong cash flow and very experienced management team that is likely to steer the business through the present and future challenges.

Similarly, Burberry (LSE: BRBY) (NASDAQOTH: BURBY.US) is enduring a challenging period, with currency headwinds and lower than expected demand from Asia hurting the company’s short term sales figures. However, Burberry is a very appealing business with a strong balance sheet, excellent brand and the scope to expand sales across the globe. As such, its share price fall of 10% in the last three months appears to be an overreaction – especially since factors such as currency headwinds are part and parcel of the operations of a global firm. Therefore, with Burberry having a price to earnings (P/E) ratio of 19.3, it appears to offer good value for long term investors.

Meanwhile, CRH (LSE: CRH) is performing exceptionally well, with its bottom line set to rise by 43% this year and 33% next year as the building materials company benefits from a strong UK housing market. While this may not represent a low in the company’s operating cycle, things could get better for CRH, since continued low interest rates and an improving UK economy are set to combine to create an increasingly appealing housing market in the UK. As such, CRH still seems to be undervalued at the present time, with its price to earnings growth (PEG) ratio of 0.6 indicating significant share price appreciation potential.

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Peter Stephens owns shares of Burberry, CRH, and Rio Tinto. The Motley Fool UK has recommended Burberry. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.