The Motley Fool

Two high-quality FTSE 100 stocks I’d buy as coronavirus uncertainty crushes the market

Image source: Getty Images.

It’s fair to say coronavirus is now having a huge impact on global stock markets. In less than three weeks, the FTSE 100 index has fallen from 7,400 points to around 6,000 points, which represents a decline of just under 20%. 

At times like these, investing can certainly feel challenging. No one likes seeing the value of their investments plummet. However, if you’re a long-term investor, this kind of market weakness can also provide amazing buying opportunities. With that in mind, here’s a look at two high-quality FTSE 100 companies I believe look attractive right now.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Rightmove

One top FTSE 100 stock that’s popped up on my radar is property website operator Rightmove (LSE: RMV). It was trading above 700p a month ago, but now can be purchased for around 580p. As a result, its forward-looking P/E ratio has dropped to 26.9. I think that’s a very reasonable valuation for a company of RMV’s ilk.

The main reason I like Rightmove is that it’s the clear market leader in the UK online property space. Indeed, according to the company’s most recent annual report, 2019 was the ninth consecutive year Google reported that more people start their home search with ‘Rightmove’ rather than ‘Property’. This is a clear competitive advantage.

I also like the fact Rightmove is highly profitable (return on capital employed last year was 384%) and cash generative, it pays a small dividend (and has a great dividend growth track record), and it has a strong balance sheet.

All things considered, I see Rightmove as one of the most attractive growth plays in the FTSE 100. With the stock down nearly 20% over the last month, I think now is a great time to be building a position.

JD Sports Fashion

Another top FTSE 100 stock that’s dropped into my ‘buy-zone’ is JD Sports Fashion (LSE: JD). It was trading near 880p in February, yet now trades for around 660p. That means the forward-looking P/E ratio has fallen to about 17.5, which is an attractive valuation, in my view.

One reason I like JD Sports Fashion is the market for athletic footwear is continuing to grow at a very healthy rate. According to industry experts, global sales are expected to climb at around 7-8% per year in the next few years. JD, with its exposure to leading brands such as Nike and Adidas, looks well placed to capitalise. In addition, JD is also benefiting from the still-strong athleisure fashion trend.

Like Rightmove, JD has quality attributes. For a start, it’s a very profitable company. Last year, return on capital employed was 27%. In addition, the company is extremely cash generative and has a high level of free cash flow.

Overall, there’s a lot to like about JD, in my opinion. And with the shares having fallen significantly over the last few weeks, I think now is a great time to consider buying a slice of the business.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Edward Sheldon owns shares in Rightmove, JD Sports Fashion and Alphabet. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Alphabet (C shares) and Nike. The Motley Fool UK has recommended Rightmove. 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.

Where to invest £1,000 right now

Renowned stock-picker Mark Rogers and his select team of expert analysts at The Motley Fool UK have just revealed 6 "Best Buy" shares that they believe UK investors should consider buying NOW.

So if you’re looking for more top stock ideas to try and best position your portfolio in this market, then I have some good news for your today -- because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.