Over, the past few weeks, the stock market has recovered from its March crash. However, despite this performance, several FTSE 100 bargains still seem appealing, based on their long-term growth prospects.
As such, buying a basket of these stocks, like the two businesses profiled below, could be a sensible long-term financial decision.
FTSE 100 bargains on offer
Steel producer Evraz (LSE: EVR) appears to be one of the most undervalued companies in the FTSE 100 right now. While the outlook for the company is quite uncertain in the short term, due to the risks facing the global economy, its competitive advantages should allow the business to stand out in the long run.
Evraz is a fully integrated steel producer. It not only manufacturers and sells steel, but produces the raw materials as well. This may help the company remain competitive in a highly competitive market.
Evraz’s other advantage is its high insider ownership. Management still owns most of the business. This means they’re highly incentivised to achieve the best returns for investors. This is why the company stands out among other FTSE 100 bargains.
Indeed, before the coronavirus crisis, Evraz offered one of the most attractive dividend yields in the FTSE 100.
Therefore, with the industrial company’s shares trading 29% lower than they were at the start of the year, now could be a great time to buy into this long-term recovery story. Its vertically integrated business model and substantial management ownership may help it stage a strong recovery as the world economy starts to grow again.
As FTSE 100 bargains go, WPP (LSE: WPP) stands out. Shares in the company have been struggling for years, but it remains the most significant media agency in the world. This gives it an edge over competitors and strong recovery potential in the next few years.
At the beginning of the coronavirus crisis, companies pulled their advertising spending, which had a significant impact on WPP’s top line. However, advertising spending has recovered and even started to grow again in some markets in recent weeks. That suggests WPP is through the worst of it.
Of course, a second wave of coronavirus could destabilise the company’s recovery. But, as other businesses around the world fight for customers in a harsh economic environment, WPP may benefit. Furthermore, the group’s global diversity could be a crucial factor in its recovery in the coming years.
With this being the case, buying WPP as a long-term investment after the stock’s recent pullback could help you grow your financial nest egg.
Even though shares in the media giant have recently staged a modest recovery, the stock is still down 40% year to date. This implies these shares continue to offer a margin of safety at current levels.
Buying these two FTSE 100 bargains as part of a well-diversified investment portfolio could generate impressive total returns in the years ahead.
If you are looking for other companies to include in your portfolio alongside WPP, some of our favourite Investments are profiled in the report below.
Markets around the world are reeling from the coronavirus pandemic…
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Rupert Hargreaves has no position in any of the 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.