The Motley Fool

Have £2k to invest in FTSE 100 shares? Here’s how I’d find stock market crash bargains

Finding the FTSE 100’s best bargains after the index’s recent crash may be a relatively challenging task. After all, it’s unclear which sectors can improve their financial performances over the coming years. It’s even more difficult to accurately value UK shares to access wide margins of safety.

However, by focusing your capital on financially-sound businesses in sectors that offer long-term growth potential, you can generate high returns over the coming years. As such, now could be the right time to invest £2k, or any other amount, in blue-chip stocks after the market crash.

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...

FTSE 100 growth potential

The FTSE 100’s growth outlook has arguably not been more uncertain since the last global economic downturn during the financial crisis. It seems likely a period of weak economic performance will now take place. Since it’s not possible to know how long it’ll last, identifying companies that can survive an extended period of time with lower sales could be a sound move.

For example, analysing company balance sheets to find businesses with low debt and access to liquidity should it be needed could be a worthwhile move. They may be better able to cope with lower sales. Companies that have a lower proportion of fixed costs could also be more adaptable to a period of slower growth. Such businesses may be less risky than their peers, and could warrant higher share prices.

Long-term trends

Of course, some FTSE 100 growth trends could remain in place despite coronavirus. For example, demand for healthcare and the switch to conducting more business online are established trends that look set to persist, and even grow more quickly, in future.

Therefore, buying stocks that focus on such trends could be a sound move. Companies operating in sectors such as online retailing and healthcare who are implementing new technology could become increasingly valuable. Identifying them now when they may trade on low valuations could allow you to build a portfolio of bargain shares that offers an attractive risk/reward opportunity.

Low valuations

As mentioned, valuing FTSE 100 stocks is more difficult at the present time due to the risks facing the world economy. However, identifying UK shares that trade at a discount to their peers despite stronger financial positions could be a sound move.

They may be able to command a higher valuation in the long run as they’re better suited to an uncertain economic outlook that may quickly change. They may also be better able to gain market share at the expense of weaker sector peers.

As ever, buying high-quality businesses at low prices could be a sound move. Many UK shares currently representing bargain status after the stock market crash. So now could be the right time to build a portfolio of FTSE 100 shares.

A Top Share with Enormous Growth Potential

Savvy investors like you won’t want to miss out on this timely opportunity…

Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!).

Not only does this company enjoy a dominant market-leading position…

But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks!

And here’s the really exciting part…

While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes.

That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021.

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

Peter Stephens 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.