As a retail investor, I’m always on the search for the next value stocks to add to my portfolio.
My investment strategy is simple. I plan to continue buying undervalued shares today and hold them for decades. By doing this, I’m setting myself up for a more comfortable retirement. If they have a juicy dividend yield, that’s a bonus.
These two FTSE 100 shares look like bargains not to be missed. But is that the case?
JD
It’s not been the strongest of years so far for JD Sports Fashion (LSE: JD). In 2024, its shares price is down 30%. In the last 12 months, the retail giant’s stock has lost 37.6% of its value.
That’s largely due to a profit warning the business issued back in January that stated it now expects to make around £935m in annual profits, 10% below its original guidance.
JD certainly faces an uphill battle going forward when it comes to turning around its fortunes. Inflation has eaten away at its margins. As the cost-of-living crisis continues, it’s likely that consumer spending will remain subdued for the time being.
However, is that really an issue? The stock now looks very cheap, trading on around just nine times earnings. Despite short-term problems, the business is also in good shape to perform well in the years to come.
It remains the dominant leader in the market. What’s more, it has plans to open new stores going forward, as well as continue investing in its supply chains. Albeit small, there’s also a 0.9% dividend yield to consider.
BP
Another stock I’m eyeing is BP (LSE: BP). I opened a position in the oil giant earlier this month. I’m up 3.8% — but a quick spike doesn’t get me too excited. I plan to hold my shares for the long run.
Like JD, BP shares look cheap. Right now, they’re trading on 6.9 times earnings.
They also provide a meaty yield of 4.8%. Alongside that, BP will return $1.75bn to shareholders in the first quarter of this year through share buybacks. By the end of 2025, it plans to buy back a total of $14bn worth of shares.
The largest threat to the business is the transition to renewable energy. There has been a push in recent times from governments to move away from fossil fuels. In the years to come, there’s no doubt BP will face even more scrutiny.
However, I think it’ll be some time before we completely wean off fossil fuels. And BP is a frontrunner when it comes to the green transition. It has invested heavily in areas such as biofuels. Its recent purchase of Europe’s largest solar developer further highlights its ambition to achieve its wider goal of cutting oil and gas output by 25% by 2030.
Unmissable?
So, are these shares the unmissable bargain they make out to be? Well, that’ll vary from investor to investor.
But both look cheap to me, trading below the FTSE 100 average. And I see them as having the potential to provide some healthy returns in the long run at their current prices.
With any spare cash I have in the weeks ahead, I’ll be looking to add to my BP holdings. I’m also keen to open a position in JD.
The post Are these 2 value stocks unmissable bargains? appeared first on The Motley Fool UK.
Should you buy BP now?
Don’t make any big decisions yet.
Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.
And he believes they could bring spectacular returns over the next decade.
Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows…
When such enormous changes hit a big industry, informed investors can potentially get rich.
So, with his new report, Mark’s aiming to put more investors in this enviable position.
Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!
Grab your FREE Energy recommendation now
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFFFFF”, ‘color’, ‘#FFFFFF’);
})()
More reading
Down 17%, there looks a lot of value to me in BP’s share price
Can I make sustainable passive income from share buybacks?
JD Sports Fashion shares: an incredible investment opportunity or a value trap?
Why wait until April? Here’s how I’d invest a £20K Stocks and Shares ISA now!
At 108p, I think this FTSE 100 stock could be 89% undervalued!
Charlie Keough has positions in Bp P.l.c. 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.
