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I see these two FTSE 100 firms as obviously mispriced, so I’d buy both shares today!

The FTSE 100 keeps yo-yoing around this month, in what I call the dangerous dog days of August.

The FTSE 100 is volatile

Given the havoc wreaked by the Covid-19 virus, it’s no wonder that the FTSE 100 keeps bouncing around like a ball. As I write, it is up 77 points at 6,128, having peaked at 6,206, before falling back almost 80 points today.

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What’s noticeable is just how volatile the FTSE 100 is, both in terms of intra-day and weekly movements. It seems that the main UK index is being buffeted about by the much larger S&P 500 index. When the US market moves sharply, the FTSE 100 follows almost immediately (and generally in sync, too).

FTSE 100 share mispricing is good

As a result of worries about coronavirus, US-China trade talks, Brexit, and so on, mispricing is commonplace among FTSE 100 stocks.

I’m not stating that all FTSE 100 stocks are mispriced, underpriced, or dislocated. Nor am I commenting on the level of the index itself. All I’m saying is that there are large, high-quality, well-run FTSE 100 companies whose share prices seem plain wrong to me. For me, these misquoted share prices fail to reflect the future economic prospects of their issuers.

I like the look of these two businesses

When considering whether a share is attractively priced to buy, I consider the words of US fund manager Peter Lynch: “[Remember,] a share is not a lottery ticket…it’s part-ownership of a business.”

Today, I think that the market has mispriced the shares of these two fundamentally sound FTSE 100 businesses. For the record, I’d buy shares in both firms today.

1. Barclays at 110.6p (for a market value of £18.5bn)

Shares in Barclays (LSE: BARC) are up 4p (3.7%) today, but I think they have way further to go. Of course, Barclays shares are being bashed because it’s a huge lender during the worst economic depression since Georgian times.

But today’s tough conditions will not persist forever and, eventually, Barclays will be back on its feet, making profits and paying dividends. On 16 December last year, Barclays shares closed at almost 193p, close to double their current level. Should this FTSE 100 bank be worth half what it was, solely due to Covid-19? I say no, so I’d buy Barclays today.

2. ITV at 65.24p (for a market value of £2.5bn)

As I write, shares in ITV (LSE: ITV) have leapt 3.22p (5.2%) today. Not for any company-specific reason, but simply because today is another ‘risk-on’ day in the FTSE 100. Yet ITV shares have crashed 39.5% over the past 12 months. Furthermore, on 13 December last year, ITV shares hit their 52-week high of 165.9p – more than £1 above their current level.

Only last week, I wrote about ITV’s attractions and its ongoing recovery from Covid-19 lockdowns. Since my article, this FTSE 100 (sadly, not for long) share has jumped by 8.1%. Again, this is solely due to market momentum and not any new company developments.

I suspect that ITV would be a tasty morsel for a much larger media rival. Therefore, I foresee perhaps as much as 100% upside from here. That’s why I’d buy this beaten-down share today.

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Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays and 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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