In these uncertain times, how can investors find safer ways to invest their hard-earned cash? More and more people are looking for cheap FTSE stocks as a potential destination for their savings, with lockdown providing plenty of time for research.
Cheap FTSE stocks exist, if you look carefully…
Can investing in shares give you great returns, even during coronavirus? Of course! But you must pick your portfolio wisely. Here are three shares from the FTSE 350 that I think show great promise for the future:
Back to bus-ness
National Express (LSE: NEX) has started selling travel tickets for July 1st onwards. The company will start off by operating a core network in the UK focused on large and medium-sized cities and towns. After a tough few months, some earnings will finally start trickling in.
With its shares still selling more than 50% lower than the January high, there could be a nice profit when earnings normalise in 2021. Whilst the current ratio is relatively low, the company has improved its liquidity position – it now holds £1.5 billion in cash and undrawn committed facilities. And, at 210p, these shares are trading at just six times last year’s earnings.
Though future earnings are likely to be largely depressed and dividends interrupted in the short-term, 2021 should be a brighter year for National Express. Its shares have more than doubled from its lockdown lows, but there could still be a lot of upside potential!
A potential gold mine
The Federal Reserve is printing huge amounts of money. When the money supply increases, the likely outcome is inflation. As such, commodity prices are likely to skyrocket. Gold-mining companies could benefit greatly from rising commodity prices and so too could their shares!
Centamin (LSE:CEY) is a FTSE 250 stock currently showing strong gains – it’s up 80% from its March low. Centamin says its Sukari mine in Egypt is fully operational. It has been unaffected by the coronavirus outbreak and there are enough workers and supplies to last into the third quarter – when global travel restrictions are expected to ease.
It is currently providing a dividend at a 4.4% yield of the current price (186p). This passive income can be re-invested and bolster your growing portfolio.
Anglo American dream
Another FTSE mining company, Anglo American (LSE:AAL) produces platinum as well as other metals and minerals needed for industry. It is currently selling under 10-times earnings, with a current ratio just under 2.
EBITDA has increased consistently since 2015, when crashing commodity prices precipitated a loss. The company has cleaned up since then, trimming down the total number of mines it operates and cutting costs – whilst increasing revenues. Improvements in cost control and productivity, along with better prices has done wonders for profits and cash generation. Which is reflected in the balance sheet too – debt’s down from $12.9bn in 2015 to $4.4bn today.
The stock is fairly expensive at 1,573p, so the amount you should purchase depends on the total amount you are willing to invest. Mining stocks aren’t very glamorous, but that doesn’t mean they won’t add a shine to your diversified portfolio!
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Toby Aston has no position in any 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.