I’m looking to top up my Stocks and Shares ISA before April’s deadline, and the following FTSE 100 stocks have all caught my eye. They’re the type of companies investors overlook, so there’s not much froth in their valuations.
I’m a longstanding fan of unsung hero Bunzl (LSE: BNZL). This £11bn outsourcing specialist sells everyday hygiene, kitchen and packaging items to other businesses, rather than consumers. Nothing glamorous, just bits and bobs that businesses all over the world need. That may explain why it goes under the radar.
Bunzl generates around 60% of its operating revenues from North America, which gives it a huge market to aim at. It’s grown rapidly through acquisition, spending an average of £425m a year buying up smaller rivals in the last three years. Today it’s on the trail of privately-owned catering equipment specialist Nisbets, valued at between £450m and £500m.
So many shares to buy!
Bunzl’s revenues soared during the pandemic, as sales of protective equipment rocketed, but dipped afterwards. The stock has jumped 22.67% over six months though, following an optimistic profits update in December, and 10.2% over the year. The yield is modest at 1.9% and it’s a little pricey at 17.6 times earnings, which is a risk, but I’d still buy Bunzl at that price.
I’d also really like to buy vaccines and drugs maker GSK (LSE: GSK). In its former incarnation GlaxoSmithKline, this was a no-brainer buy for many dividend investors. After a bumpy few years, it could be again.
Long-term investors have had to be patient, as the company diverts dividends into building its drugs pipeline. Today it yields 3.47%, below the FTSE 100 average.
But its investments appear to be paying off across specialist areas including hepatitis B, shingles, blood cancer and HIV. Earlier this month, GSK also settled a US legal case over heartburn medication Zantac without admitting liability, removing a layer of worry.
I’m ready for the recovery
I wanted to buy GSK at the start of the year but didn’t have the cash. Its shares started 2024 well and are up 14.74% over 12 months. My worry is that producing new treatments is a slow and laborious process, and the next blockbuster never quite arrives. However, trading at 10.76 times earnings GSK still looks cheap and I’d love to buy it today. Again, I just need the money.
Finally, I’m also itching to buy asset manager Schroders (LSE: SDR). Most investors will be delighted they overlooked this stock, which is down 34.47% over five years and 19.21% over the last 12 months.
Recent times have been tough on fund managers generally, with share values ravaged by pandemic, war and inflation. This has knocked customer inflows and assets under management at Schroders and others.
Yet as inflation falls and central bankers prepare to start cutting interest rates, markets should get some of their mojo back.
Now looks like a good time to buy Schroders at just 13.25 times earnings with a bumper 5.36% yield. As with all three of these stocks, I would aim to hold Schroders for the long-term, to give my capital and income time to compound and grow. I’m hoping that in a few years, they’ll be impossible to overlook. Now I just need the cash to buy them before the ISA deadline.
The post I’m itching to buy these 3 hidden FTSE gems in a Stocks and Shares ISA appeared first on The Motley Fool UK.
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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Bunzl Plc, GSK, and Schroders Plc. 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.
