The Motley Fool

3 cheap FTSE 100 shares I’d buy today

Image source: Getty Images

The FTSE 100 index hasn’t gone anywhere in September, but many stocks’ share prices have been rising. These index-beaters have more than made up for the fall seen during the stock market crash earlier in the year. Some of them are even at all-time highs right now. This is all very good as long as we already have these shares as part of our investment portfolios. 

But for those of us who would like to buy high-quality shares with good prospects now, the big challenge is that they have already run up quite a bit. As a result, we can now reasonably doubt if their share prices will rise much further.

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...

We may be tempted to buy FTSE 100 stocks that are still cheap. I get that. In fact, I have three such on my own stock watch list. But I’d suggest buying them only based on your own risk threshold. 

High risk: IAG is a cheap FTSE 100 share for the brave

I don’t think there’s any debate about the fact that FTSE 100 aviation stock International Consolidated Airlines Group is a high-risk bet now. Its share price is a 91p as I write. However, at a fraction of its early 2020 share price, the owner of British Airways can be a high-risk/high-reward bet for the brave investor over time. But ‘high risk’ is the operative phrase here. Everyone knows the big blow airlines have suffered from Covid-19 and following from that, the company’s revenues more than halved in the first six months of this year. It’s unlikely to recover in a hurry, considering that the pandemic is nowhere near over. But the patient investor may still end up ahead. 

Medium risk: Barratt Developments can see better times ahead

A less risky, but still fairly beaten down stock is the FTSE 100 real estate company Barratt Developments. At  £4.8, its share price is at almost half the levels seen in pre-coronavirus months this year. Property stocks get hit hard by economic slowdowns, so investors always need to be prepared for that. The lockdown made matters worse. 

The results have been poor recently, as expected. But unlike aviation, property’s prospects appear to be better. Housing market numbers are sharply improved. A stamp duty holiday is another shot in the arm for builders as well. If Brexit negotiations go well, the likes of BDEV will gain. To put it differently, the stock isn’t without risks. But these risks may well be met. 

Low risk: Rentokil Initial has secure demand

Finally, the lowest risk stock on my watchlist right now is the FTSE 100 hygiene services and pest control provider Rentokil Initial, which I talk about in greater detail in another article today. It’s share price was £5.5 at yesterday’s close, which isn’t very far from the BDEV share price. Some would argue that it’s not cheap going by its steep earnings ratio and the run up it has seen over the year. I think even if it looks expensive right now, given the nature of its services, it isn’t likely to stagnate for the long term, especially in a weak economy that favours defensives.

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...

It’s just ONE innovation from a little-known US company that has quietly spent years preparing for this exact moment…

But you need to get in before the crowd catches onto this ‘sleeping giant’.

Click here to learn more.

Manika Premsingh 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.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.