It has been a shaky start to August for FTSE 100 stocks. Fears of a stock market correction or crash continue. And major bank JPMorgan‘s now predicting a 35% chance of a US recession, up from its previous prediction of 25%.
While I’m bullish on the UK stock market, I know any downturn in the US will likely spill over to the domestic market.
That’s what has happened in the last couple of days. And these stocks have taken a hit as a result. If I had the cash, I’d add both to my portfolio today.
Retail titan
First on the list is Marks and Spencer (LSE: MKS). Its shares are down 3.4% over the last five days. That said, they’re still up a healthy 14.6% in 2024 and 54.9% over the last 12 months.
I reckon its shares now look like pretty good value. They’re trading on a price-to-earnings (P/E) ratio of 15.2 and a forward P/E of 11.9.
I like the work M&S has taken to turn itself around. Just a few years back it seemed it had well and truly been left in the dust by its competition. But a fresh strategy has brought the high street staple back to life.
It has upgraded its stores and placed more emphasis on boosting its online presence. So far, it’s safe to say it’s working. Last year, profits soared 58%.
I’m still wary of a few issues. The main one is the current state of the economy. We’re not out of the woods with inflation and while we’ve seen the first interest rate cut, a delay in future cuts would impact consumer confidence.
But as a long-term buy, I think Marks and Spencer is a business on a strong trajectory. That’s why its recent share price dip has me eager to add it to my holdings.
Financial powerhouse
Now let’s turn the attention to Schroders (LSE: SDR). It hasn’t fared quite as badly as its FTSE 100 peer in the last five days, falling just 1.6%. But it’s down 20.9% year to date, which doesn’t make for great reading.
That said, its sliding share price does equal a bigger dividend yield. It now clocks in at 6.4%, considerably above the FTSE 100 average. Its recent half-year results disappointed, but its interim dividend remained flat at 6.5p per share.
I like Schroders for a few other reasons. I think rate cuts in the years to come will benefit the business massively. They’ll boost investor confidence and give markets some much-needed positive sentiment.
Of course, like Marks and Spencer, a delay in rate cuts would likely harm its share price. Its assets under management are also prone to taking a hit should we endure more uncertainty surrounding the economy.
But short-term volatility’s often part and parcel of the game. And trading on a P/E of 13.8 and a forward P/E of 11.5, I think now could be a savvy time for me to swoop in.
The post After their recent dips, I’m watching these FTSE 100 stocks closer than ever before! appeared first on The Motley Fool UK.
Pound coins for sale — 31 pence?
This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!
Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.
What’s more, it currently boasts a stellar dividend yield of around 10%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?
See the full investment case
More reading
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2 FTSE companies I’m itching to buy if we get a full-blown stock market crash
I’d buy these 2 shares to target bulky passive income
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended 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.
