There are plenty of top FTSE 100 stocks trading at rock-bottom prices following last week’s mini stock market crash. Here are two top blue-chips I’m considering buying right now.
Motoring along
Auto Trader’s (LSE: AUTO) one of these dirt-cheap FTSE 100 stocks I’m considering loading up on. Okay, the UK retail share fell only fractionally during last week’s crash. But at current prices of 730p per share it still offers supreme value for money. For the fiscal year ending March 2022 the online vehicle marketplace trades on a forward price-to-earnings growth (PEG) ratio of 0.3. This is created by City predictions that earnings here will jump 89%.
Any reading below 1 suggests a share could be undervalued by the market. I certainly think this is the case at Auto Trader, even following the share price jump that followed this month’s half-year financials. Then it said that revenues clocked in at a first-half record of £215.4m, up 89% year-on-year and a 15% improvement from the corresponding 2019 period. Pre-tax profits meanwhile soared 127% between January and June from the first six months of 2020.
Record breaker
Auto Trader is thriving for various reasons. It’s taking advantage of the broader explosion in online shopping, thanks in large part to its position as undisputed market leader. It’s thriving as new car shortages boost demand for pre-owned vehicles. And the FTSE 100 firm is benefiting from the success of new products like its ‘Retailer Stores’ service. This enables retailers to build brand awareness.
I think Auto Trader’s a great buy despite the threat that broader consumer confidence could collapse if the Covid-19 crisis worsens. Sinking sentiment is particularly dangerous for sellers of big-ticket items like cars.
Another FTSE 100 star
The ITV (LSE: ITV) share price has been falling steadily since mid-November. It closed at multi-week lows on Friday as investors feared a sudden drop in advertising spending. They also chewed over the possibility that programme production might halt again if Covid-19 cases explode.
I think these concerns are baked in to ITVs valuation though. Today the broadcaster trades at 111p per share, leaving it with a forward price-to-earnings (P/E) ratio of 7 times for 2022. Furthermore, its 5.3% dividend yield for next year smashes the broader FTSE 100 average of 3.5%. As a long-term investor, I’m encouraged by the impressive momentum of its ITV Hub video-on-demand (VoD) platform.
Viewing activity isn’t just ballooning as the broader VoD segment grows. The vast amounts ITV is investing in its software and in programming is paying off handsomely and allowing it to take on the likes of Netflix and Amazon‘s Prime service. The hub had 34.8m registered users as of September, up 2.7m year-on-year.
I’m also tempted to buy ITV because of the massive sums it’s dedicating to ITV Studios through organic investment and via acquisition activity. The maker of hits like Love Island and I’m a Celebrity is building a global production giant in order to turbocharge future revenues. I’d buy the FTSE 100 firm even though it faces huge competition from those aforementioned US streaming giants.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon, Auto Trader, 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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