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I’d invest £3k in these 2 bargain FTSE 100 shares to become an ISA millionaire

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Many FTSE 100 shares have been shooting back up after plunging in the stock market crash. But some stocks continue to languish. And that’s not surprising because in many cases, they’ve seen their revenues and profits plunge because of the lockdowns.

However, the restrictions are beginning to lift. Trading will resume soon for many businesses, although volumes could be lower because of social-distancing and other measures. Indeed, earnings look set to be smaller, at least initially.

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FTSE 100 shares with big estimates for earnings

But City analysts are optimistic. They’ve been slapping on three-figure percentage estimates for the recovery in earnings in 2021 for many companies. And I’m sanguine too. My guess is the virus will fade quickly, perhaps because of a vaccine. I’d be happy to buy the shares of these fallen FTSE 100 companies now with a long-term holding period in mind.

One example is hotel and restaurant owner Whitbread (LSE: WTB). The company is midway through the process of executing a rights issue to raise £980m net of expenses. And to me, the strategy looks like a good one. The directors reckon the new money will support the firm’s growth strategy. To begin with, the company plans to keep the funds on deposit ready to invest when opportunities arise.

The idea is to expand further in the UK and German budget branded hotel markets because of “long-term structural growth opportunities.” Meanwhile, the pandemic will have weakened many competitors. And I reckon the best time to make acquisitions is when sellers are distressed because bargains are more likely to be on offer.

When restrictions ease, my guess is that it could be relatively straightforward to apply social-distancing measures in hotels, if necessary. I think the stock is attractive.

Pent-up demand

I also like the look of clothing and accessories retailer Next (LSE: NXT). The stores have been shut through the lockdown. But there’s also an online business that managed to keep trading, although not at previous levels.

Overall revenues and profits are, of course, well down from their prior levels, but so is the share price. Meanwhile, at the end of April, the company’s comprehensive statement explained how it’s been preparing for life with coronavirus.  The directors reckon Next will emerge from lockdown into a world with lower revenues, higher costs and reduced profits.

However, I think pent-up demand from customers will help the business recover when people finally return to the shops. And over a longer time period, the virus will fade and social-distancing will go too.

So I’d be inclined to buy a few Next shares now and hold them with a period of years in mind. But these two aren’t the only FTSE 100 shares I like the look of. Several others look poised for recovery as well.

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Kevin Godbold has no position in any share mentioned. The Motley Fool UK owns shares of Next. 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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