Image source: Getty Images
I get nervous about buying growth stocks after the market has been up, because I fear overpaying at the top of the cycle. I am happiest when the market is at rock bottom and there is an opportunity to buy at the bottom.
This makes me nervous when purchasing. FTSE 100 growth stocks today, as the index hits new all-time highs. However, several stocks still look like really good value, including these three.
Lloyds of London Insurance Company beazley (LSE:BEZ) looks like a super cheap deal, at just 4.18 times trailing earnings. Especially with the FTSE 100 as a whole trading at 12.4 times.
Bargain stocks
I expected to see a dismal share price performance, but in fact the Beazley share price is up 17.06% in the last three months and 9.53% for the year.
Beazley got a real boost on March 7, when it reported that full-year 2023 pretax profits rose 155% to a record $1.25 billion. Gross premiums have been rising for years, but there is one key metric he has no control over: claims. Costs skyrocketed during the pandemic, for example, causing losses for Beazley.
Investors get a modest dividend, with a current yield of 2.23% annually, but the board recently agreed to a generous $325 million share buyback program. It is a successful company that comes cheap and I am tempted to buy it.
Here's a cheap growth stock I recently bought: JD Sports Fashion (LSE: JD). I had been on the sidelines for years, watching his stock grow and grow, but I decided it was too late to join in the fun.
I discovered my opportunity on January 4, when its shares plunged 20% after the board warned that profits would be £125m lower than expected following a poor festive trading period. I bought them on January 22nd.
A trading update on March 28 suggested that JD had stopped the rot, although the “challenging” The market was still causing problems. My position is up a modest 4.38%. I think there is still a buying opportunity here as the JD Sports share price is down 26.08% in 12 months.
The FTSE 100 is flying
The stock appears to be a decent value, trading at 8.68 times trailing earnings. Sports and fashion retail is a tough market, but with a five-year view, I'm optimistic.
Meanwhile, the owner of British Gas Central (LSE:CNA) is an incredibly cheap trade, at just 3.39 times earnings. This is particularly surprising given that its shares have been extremely successful, up 19.75% in 12 months and 142.83% in three years.
Centrica's share price received a real boost from the energy crisis, but suffered when oil and gas prices fell in 2023. Adjusted operating profits fell from £3.3bn in 2022 to £2.72bn, a drop of 17.6%.
However, the board increased the dividend by 33% to 4 pence per share. However, it's not a very high-income stock, with a modest trailing yield of 2.99%. Centrica has warned that revenue will fall in 2024, based on the assumption that the price of oil will continue to fall. Although that can change. Much now depends on the Middle East.
J.Morgan recently highlighted how cheap Centrica is today. He estimates the group's £1bn share buyback could be expanded by another £500m from the summer. We'll see. Given the low rating, I'm tempted to buy it today.
