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2 FTSE 100 stocks I’d buy today after they slumped 30%!

Sometimes, companies have to deal with the perfect storm of events. Luxury fashion brand Burberry (LSE: BRBY) is currently facing this prospect. The retailer has had to deal with the fallout from the political unrest in Hong Kong — one of its biggest markets. Now it’s also having to deal with the outbreak of the coronavirus across Asia.

These pressure have sent the company’s stock price down  30% since mid-January. 

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Brand value

According to recent updates from the business, 24 of Burberry’s 64 stores in Mainland China were closed with remaining stores operating with reduced hours and seeing significant declines in footfall.

Management issued this update at the beginning of February. It’s unclear if trading has deteriorated since. However, while the outbreak will undoubtedly mean reduced sales and profits in the near term, from a long-term perspective, Burberry’s outlook remains bright.

The company’s biggest asset is its brand. This isn’t going to disappear overnight, even if authorities cannot control the virus.

What’s more, Burberry has a strong balance sheet. Unlike many other businesses, which have borrowed heavily and, as a result, could face ruin if the outbreak leads to a sustained drop in profitability, Burberry reported a net cash balance of £837m at the end of fiscal 2019.

This healthy cash balance should ensure the group remains solvent throughout the crisis. It also gives management flexibility with regards to the company’s dividend.

With enough cash on the balance sheet for at least four years of dividends, it seems as if the distribution is safe for the time being. As such, now could be a great time to snap up shares in the British retail champion.

The stock’s dividend yield has hit 2.6%, and it’s trading at a 2021 price-to-earnings ratio of 18. That’s 10% below the long-term average of 20.

Global giant

Shares in global advertising giant WPP (LSE: WPP) lost nearly a fifth of their value in a single day last week.

The company published its results for 2019, which came in below expectations on the day when concerns about the virus outbreak reached fever pitch.

Investors didn’t wait around to see if the organisation had any plans to return to growth. They rushed for the exits as fast as possible. Following this decline, the shares are off 33% so far this year. 

WPP’s results were disappointing, but they weren’t terrible. Reported revenue increased by 1.4%, and like-for-like revenue was flat. Reported profit before tax declined by 21.9%.

However, a couple of exceptional one-off profits recorded in the same period a year ago, and not repeated, were responsible for the bulk of the decline.

Therefore, WPP’s headline revenue growth provides a better gauge of the company’s health. The group’s management has also launched a £150m share repurchase plan, which suggests they’re incredibly confident in its outlook.

As a result, now could be the time to take advantage of recent market declines and snap up a share of this global advertising giant.

It’s currently dealing at a P/E of 8.2, which suggests a wide margin of safety. The stock also offers a dividend yield of 8.1%. These numbers indicate that if the company returns to growth, the share price could jump significantly.

Are you prepared for the next stock market correction (or even a bear market)?

It’s official: global stock markets have been on a tear for more than a decade, making this the longest bull market in history.

But this seemingly unstoppable run of success poses an uncomfortable question for investors: when will the current bull market finally run out of steam?

Opinions are split about whether we’re about to see a pullback — or even a bear market — in 2020. But one thing is crystal clear: right now there’s plenty of uncertainty and bad news out there!

It’s not just the threat posed by the coronavirus outbreak that could cause disruption — Trump’s ongoing trade-war with China and the UK’s Brexit trade negotiations with the EU rumble on... and then there’s the potential threat of both the German and Japanese economies entering recession...

It all adds up to a nasty cocktail with the potential to wreak havoc and send your portfolio into a tailspin.

Of course, nobody likes to see the value of their portfolio fall, but fortunately, you don’t have to go it alone. Download a FREE copy of our Bear Market Survival Guide today and discover the five steps we believe any investor can take right now to prepare for a downturn… including how you could potentially turn today’s market uncertainty to your advantage!

Click here to claim your free copy of this Motley Fool report now.

Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Burberry. 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.