Stock market

2 dirt cheap FTSE 100 growth shares to consider right now

Image source: Getty Images

gave FTSE 100A great place to find cheap growth stocks for global investors. Years of economic and political uncertainty have meant that many of Britain’s blue chips have underperformed their overseas peers.

Footsy has jumped in price recently, even hitting new record highs. But the fact that tons of top stocks still trade at multiples of earnings is hard to believe.

These are two that I believe value investors may find too cheap to miss.

Fiji Sale

Coca-Cola Hellenic Bottling Company(LSE:CCH) part of a bargain I just added to my Self Invested Personal Pension (SIPP).

It has risen sharply in recent weeks, helped by another impressive set of trade numbers that beat forecasts. gave Coke, Sprite And Fanta. Bottler reported a 12.6% increase in organic revenue in the first quarter. This was much higher than the predicted increase of a sub-10%.

Yet even today this shit looks cheap. Annual revenue is forecast to grow by 27% in 2024. This makes Coca-Cola HBC shares trade at a forward price-to-earnings growth (PEG) ratio of 0.5. Any reading below 1 indicates that the stock is undervalued.

It’s not all plain sailing for the company. Indeed, a continued fall in the euro poses a growing risk as eurozone interest rates reverse and political turmoil in the trading bloc increases.

The company reports in euros, exposing it to translation risk when profits from non-eurozone regions are converted into Europe’s single currency.

Yet on balance, I still believe the FTSE 100 company remains a superior investment today. Sales in developing and emerging markets continued to grow by 12.5% ​​and 19% respectively in the first quarter. The trend is set to continue as wealth levels rise rapidly in these regions.

CCH also has an excellent track record of innovation as it continues to launch products in its markets. Unique powerOne of its fastest growing beverage brands was introduced. Green Zero Sugar For example, in 16 more markets in the last quarter alone.

Bank on it

The banking giant HSBC Holdings (LSE:HSBA) also has a huge emerging market footprint. In effect, it is doubling down on these growth regions by selling Western assets and reallocating capital to Asian economic hotspots such as Hong Kong, Singapore and mainland China.

Well, this is a strategy that carries risk in the near term. The Chinese economy is still struggling after the pandemic, which is causing ripples throughout the region.

However, it can be argued that HSBC’s post-earnings risks are built into its share price. The bank trades at a low price-to-earnings (P/E) ratio of 7.1 times.

Analysts in the City believe HSBC’s earnings will continue to grow strongly despite China’s difficulties. A year-on-year growth of 9% is predicted for 2024.

This is perhaps not surprising. At the moment, the broader Asia-Pacific economy is tipped to expand at a healthy pace (for example, the IMF forecasts GDP growth of 4.5 percent this year). Hence the demand for banking products is likely to increase from the current low level.

Indeed, the product’s modest penetration means that HSBC can expect sales to grow substantially over the next decade. I don’t think this is currently reflected in the company’s bargain basement valuation.


Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button