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I think these are cheap FTSE 100 and FTSE 250 The stock might be too good to ignore. Each of them trades on a very low, forward-looking price-to-earnings (P/E) ratio.
That’s why I would buy them if I had extra money to invest right now.
centamine
Profits in gold mining centamine (LSE:CEY) are very sensitive to the price of the commodity they produce. Therefore, falling bullion values could have disastrous implications for shareholder returns.
However, I believe that safe-haven demand for the yellow metal could increase sharply. Gold remains around $2,000 an ounce and looks in good shape to reach new record highs.
There are multiple reasons why precious metal prices could skyrocket again, including:
- Growing pessimism around the global economy
- Increased geopolitical tension (such as a large-scale conflict in the Middle East and new tensions between the United States and China)
- Persistent inflationary pressures
- More flexible monetary policy by central banks to boost growth
- Continued US dollar weakness
Buying a stock based on short-term gold price movements is a risky business. So I need more encouragement to invest.
In the case of Centamin, it would also buy the company for its portfolio of production assets. At its flagship Sukari mine in Egypt, the company expects to produce 506,000 ounces of the yellow metal each year between 2025 and 2034. It is also targeting all-in sustaining costs below $1,000 per ounce under a new life-of-mine plan.
The miner also has a number of interesting early-stage projects in its stable. This includes the Doropo complex in Côte d’Ivoire, where feasibility testing is planned for mid-2024.
Today, Centamin shares trade at a forward price-to-earnings ratio of eight times. They also have a substantial dividend yield of 3.8%; I think these readings make the company very attractive.
JD Sports Fashion
Sportswear retailer JD Sports Fashion (LSE:JD.) is another valuable stock on my shopping list. This despite an uncertain near-term outlook as consumer spending remains under pressure.
I think the FTSE 100 company could deliver titanic earnings growth as it acts to capitalize on the athleisure boom. City analysts predict profits will rise by 13% and 12% in the financial years to January 2025 and 2026 alone.
JD is taking advantage of this opportunity by rapidly building its store network through new openings and acquisitions. The company, which operates in Asia, Europe and North America, expects to open between 250 and 350 stores each year over the next five years.
Although it operates in a highly competitive industry, its focus on the premium segment of the market, together with the exclusive equity agreements it signs with the world’s leading sportswear companies, make it he go-to place for fashion-conscious shoppers. This gives it an obvious advantage.
In fact, as the chart above shows, the premium athleisure segment in its US market is projected to grow ahead of the overall market, suggesting that JD could be the best way to tap into this growing market.
Today, JD stock trades at a forward price-to-earnings ratio of 11 times. I think this makes it a good faith deal.
