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FTSE 100 crash: I’d buy these 2 cheap shares today ahead of a stock market rally

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The FTSE 100 may have rebounded from its recent market crash, but many of its members continue to trade significantly below their 2020 highs. As such, buying a range of them now ahead of a long-term recovery could be a sound move. After all, the index has always recovered from its various downturns and bear markets to post new record highs.

With that in mind, here are two FTSE 100 shares that could offer long-term growth potential. Yes, further declines in their prices cannot be ruled out in the short run. But they appear to offer wide margins of safety at the present time.

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FTSE 100 media stock ITV

ITV’s (LSE: ITV) recent quarterly update highlighted the impact that coronavirus is having on its financial performance. For example, its total revenue declined by 7% versus the same period of the previous year. And it could experience further falls as the lockdown continues. The crisis has forced the FTSE 100 company to close down large parts of its operations.

In response, the company is seeking to emerge from the current crisis in a relatively strong position. It has taken measures such as cost reductions that are set to lead to a fall in its overheads of £60m in the current year. It has also cut back on capital expenditure in the short run, as well as making reductions to some of its programme budgets to conserve cash.

Ultimately, ITV’s financial performance is closely linked to the prospects for the UK economy. As such, it could experience a challenging period that includes falling sales and a substantially lower bottom line. However, the FTSE 100 company’s strong market position and the 52% fall in its share price since the start of the year could make it an attractive long-term recovery opportunity.

Whitbread

Another FTSE 100 share that is experiencing severe disruption to its sales and profitability is hotel operator Whitbread (LSE: WTB). Its locations are currently closed, and it is unclear when they will reopen.

The company’s most recent update highlighted the steps it is taking to reduce costs, cut unnecessary capital expenditure and conserve cash through cancelling its planned dividend. It has also furloughed a large proportion of its employees to further reduce operating expenses.

Despite taking these measures, Whitbread’s share price is down by 45% since the start of the year. And further falls in its share price cannot be ruled out depending on when hotels reopen. But I think the stock still seems to offer a wide margin of safety. It has a solid market position, and could emerge from the current crisis in a stronger competitive position relative to its smaller peers who may not be as financially sound as the FTSE 100 business.

Therefore, while it faces major short-term risks that could negatively impact on investor sentiment towards its share price, Whitbread could offer long-term recovery potential.

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Peter Stephens owns shares of Whitbread. The Motley Fool UK has recommended ITV. 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.

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