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April 23th, FTSE 100 Shares recovered to send the UK's main index to a record close for the second day in a row. He finished at 8,044 points.
Of course, it has taken a long time to arrive. The Footsie last surpassed the 8000 milestone in February 2023!
Still, in my opinion, there are opportunities. Here are two FTSE 100 stocks I'd buy today with spare cash sitting idle.
Attractive business model
Many new investors focus on the strength of a company's technology, which is understandable. After all, a technological advantage is not a bad thing. But it's not everything.
A company may have the best cutting-edge technology, but if its business model is poor, it is unlikely to be a winning stock. Business models matter a lot.
Which brings me to InterContinental Hotel Group (LSE: IHG). It operates in the hospitality industry using an asset-light business model focused on franchises and management contracts.
This means that IHG owns very few hotels. License your brands, including Intercontinental, Holiday Inn Hoteland Corona Square, to third-party operators. These pay you upfront fees, ongoing revenue-based royalties, and fees for things like training programs for hotel staff.
This model allows IHG to expand its global brand presence without the significant costs of owning and maintaining hotel properties. Consequently, it has high returns on equity and an operating margin of 23%.
The share price is up 62% in five years, driven by the post-pandemic travel boom and strong profit growth.
Last year, the company reported an impressive $1 billion in operating profit, while adjusted earnings per share grew 33%.
However, one issue I would highlight is that the company still has quite a bit of debt due to the pandemic. This doesn't worry me too much since he's in a solid financial situation, but it's something worth keeping an eye on.
Looking ahead, IHG has flagged India as an attractive growth market. It has a strong pipeline of 45 hotels that will open there in the next three to five years.
The stock is currently trading on a forward price-to-earnings (P/E) ratio of 23. In my opinion, that's not too expensive for a quality, asset-light business.
Still discounted
The second stock I would buy even with the Footsie at a record high is Scottish Mortgage Investment Trust (LSE: SMT). I'll keep banging the drum for this one as long as it trades at a discount to net asset value.
Currently that discount is 10%. This means I can invest in the trust's portfolio of high-octane growth shares at a low price. And I like the sound of that.
One risk of Scottish Mortgage shares is that they can be extremely volatile due to the high growth investment strategy.
However, looking at the top holdings, I find it hard to believe that many of them won't become much more valuable in the future. Carry amazon, For example. Forecasts predict that it will generate $1 trillion in revenue by 2030.
Meanwhile, SpaceX achieved nearly 100 orbital rocket launches last year, up from 61 in 2022. That was more than China and Russia combined!
Valued at $180 billion in December, SpaceX is the second most valuable private company in the world. It is only behind TikTok's parent company ByteDance, which is also in Scottish Mortgage's portfolio.
