I think there are many FTSE 100 bargains to be had after the recent stock market crash. Indeed, some of the market’s top blue-chip stocks appear oversold after recent declines. Buying these businesses while they trade at low levels could lead to considerable profits.
I think retailer Next (LSE: NXT) is the perfect example. I have long been a fan of this business and its management. The company has succeeded in the navigating the changing retail environment over the past few years. By investing hundreds of millions of pounds in its online retail operation, the group was able to stay ahead of the competition. This investment also put the business in an excellent position to weather the coronavirus crisis.
Stock market crash concerns
Earlier this year, when retailers across the country were asked to shut to try and stem the spread of the virus, Next closed down the majority its operations. However, the company was soon able to restart its online business, although it had to restrict capacity initially.
Still, despite these bumps, the firm’s latest trading update reveals that performance has been better than expected in 2020. “The company’s sales performance through the pandemic has been more resilient than we expected,” its latest update stated. Following this performance, management expects the group to earn nearly £300m in pre-tax profit this year, against the previous forecast of £195m.
All of the above suggests to me that one could benefit from buying this FTSE 100 share after the recent stock market crash.
FTSE 100 recovery play
As well as Next, I think it could also be worth taking a closer look at Intercontinental Hotels (LSE: IHG). The owner of the Crowne Plaza and Holiday Inn brands has not seen the same sort of recovery as its FTSE 100 peer. The company’s revenue per available room (revpar) fell 53% year-on-year for the three months to the end of September.
As coronavirus infections start to spread again, the hotels group faces an uncertain future. Management has warned that revenue could remain depressed for some time. However, I’m optimistic about the organisation’s long-term potential.
As one of the largest hotel operators in the world, the FTSE 100 giant has substantial economies of scale. The business also maintains a strong balance sheet with billions of dollars of liquidity available. These factors should help it make the most of the recovery when it arrives. At the same time, IHG may be able to capture market share as smaller operators may not be able to withstand the continued uncertainty.
As such, I reckon buying the company today could be a sensible decision while it continues to trade at a low-level following the recent stock market crash. Over the next few years, as the global hotel market recovers, one may benefit from substantial capital gains and income returns from this sector leader.
Don’t miss our special stock presentation.
It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about.
They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market.
That’s why they’re referring to it as the FTSE’s ‘double agent’.
Because they believe it’s working both with the market… And against it.
To find out why we think you should add it to your portfolio today…
Rupert Hargreaves owns no share mentioned. The Motley Fool UK owns shares of Next. The Motley Fool UK has recommended InterContinental Hotels Group. 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.