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1 reason why I’d invest £1k in these 2 FTSE 100 stocks today

The FTSE 100 may have made strong gains in 2019 so that it now trades close to its all-time high, but a number of its members continue to offer wide margins of safety.

In many cases, their low valuations could represent buying opportunities as a result of their long-term growth prospects.

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With that in mind, here are two FTSE 100 shares that could be undervalued at the present time. As such, now could be the right time to buy them in an ISA. They could improve your chances of retiring early.

Glencore

Diversified mining company Glencore (LSE: GLEN) has experienced a number of challenges in recent months. It is facing regulatory issues, as well as a difficult economic backdrop that negatively impacted on its performance in the first half of the year.

As such, investor sentiment towards the stock is weak at the present time. It trades on a forward price-to-earnings (P/E) ratio of just 10.6, which suggests that it offers a wide margin of safety.

Clearly, the company is highly dependent on the prospects for the world economy. Although the trade war between the US and China is not yet over, their ‘phase one’ agreement could indicate a reduction in tension between the world’s two largest economies. This may mean that Glencore experiences a more positive operating environment in the coming months, as well as improving investor sentiment.

Therefore, while the stock continues to represent a risky opportunity, its reward potential may make it attractive for long-term investors compared to the wider resources sector and the FTSE 100.

BT

Also trading on a relatively low valuation is BT (LSE: BT.A). The company’s financial performance continues to be disappointing, with its most recent half-year results showing a decline in revenue of 1%.

This is a trend that has been present over recent years, with the company’s efforts to modernise its business having thus far failed to deliver a significant improvement in sales and profitability.

However, BT seems to be making progress in turning around its performance. It is focusing on improving the customer experience through the launch of a wide range of new products. This could strengthen its competitive position and lead to improving financial performance in the coming years.

With the stock currently trading on a P/E ratio of just 7.5, it appears to be cheap compared to its FTSE 100 index peers. Furthermore, it is expected to post a modest rise in net profit of 2% in each of the next two years. This could highlight to investors that it has the potential to deliver improving financial performance, and that it justifies a higher rating.

As such, now could be the right time to buy it while it offers long-term recovery potential from a low share price.

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Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.