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I think this unloved FTSE 100 company is one of the best stocks to buy today

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I believe unloved and overlooked FTSE 100 companies are among the best stocks to buy at any stage of the market cycle. Particularly today, when bargains are harder to find as the index breaks through the 7,000 barrier.

If you buy undervalued stocks and hold for the long term, you can bank outsize returns when they swing back into favour. Simply being cheap isn’t enough. The long-term investment case must be strong. Otherwise, instead of being the best stocks to buy, they can be the worst.

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I’m tempted by Russian silver and gold miner Polymetal International (LSE: POLY) and financial services platform Hargreaves Lansdown (LSE: HL), both of which have disappointed lately.

I like unloved FTSE 100 stocks

The commodity sector is up a thumping 116% in the last year, according to the Association of Investment Companies. Yet the Polymetal share price rose just 1%. It now trades at a price/earnings ratio of just 9.2 times earnings, making it one of the best and cheapest stocks to buy on the index. So what’s gone wrong?

Not much, as far as I can see. The group recent reported a 28% rise in 2020 revenues to $2.87bn. That was due to higher production volumes and commodity prices, and lower cash costs. Free cash flow jumped from $256m to $610m.

Polymetal has, nonetheless, been hit by the falling gold price, which has knocked investor sentiment. Gold has now dropped around 15% to $1,766 an ounce since peaking last August. Investors have been shunning the safe haven ever since the Covid-19 vaccine breakthrough. Others have been lured away by Bitcoin’s stunning rally.

There’s no guarantee the gold price will recover, but I suspect it might as investors sniff an opportunity. Or seek a hedge against inflation. Polymetal’s low valuation makes it one of the best stocks to buy for that scenario, in my view. A forecast field of 7.1% also tempts. You don’t get that when you buy physical gold. However, you may have to be patient while you wait for gold to shine again.

One of the best stocks to buy now?

For years, FTSE 100 listed Hargreaves Lansdown was one of the best shares to buy for growth, but it has struggled lately. Its stock is up a modest 13% on a year ago, but is still down more than 20% over two years.

The group has been hit by the Neil Woodford saga, after backing the discredited fund manager to the hilt. Now it may even face legal action. Despite its troubles, the Hargreaves Lansdown share price remains expensive, trading at 28.9 times earnings. This is relatively low by its standards. Three years ago, it traded at a whopping 45 times!

With a market-cap of £7.95bn, Hargreaves will struggle to repeat earlier turbocharged growth. It remains a solid company with loyal customers, profit margins of around 60% and a forward yield of 3%, but I’m not that excited.

Polymetal International looks like one of the best stocks to buy on the FTSE 100 today. Hargreaves Lansdown not so much.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Hargreaves Lansdown. 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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