£5k to invest? I’d add these cheap FTSE stocks to my portfolio now
The Motley Fool
Published May 21, 2020 16:07
£5k to invest? I’d add these cheap FTSE stocks to my portfolio now
In these uncertain times, how can investors find safer ways to invest their hard-earned cash? More and more people are looking for cheap FTSE stocks as a potential destination for their savings, with lockdown providing plenty of time for research.
Cheap FTSE stocks exist, if you look carefully… Can investing in shares give you great returns, even during coronavirus? Of course! But you must pick your portfolio wisely. Here are three shares from the FTSE 350 that I think show great promise for the future:
Back to bus-ness National Express (LSE: NEX) has started selling travel tickets for July 1st onwards. The company will start off by operating a core network in the UK focused on large and medium-sized cities and towns. After a tough few months, some earnings will finally start trickling in.
With its shares still selling more than 50% lower than the January high, there could be a nice profit when earnings normalise in 2021. Whilst the current ratio is relatively low, the company has improved its liquidity position – it now holds £1.5 billion in cash and undrawn committed facilities. And, at 210p, these shares are trading at just six times last year’s earnings.
Though future earnings are likely to be largely depressed and dividends interrupted in the short-term, 2021 should be a brighter year for National Express. Its shares have more than doubled from its lockdown lows, but there could still be a lot of upside potential!
A potential gold mine The Federal Reserve is printing huge amounts of money. When the money supply increases, the likely outcome is inflation. As such, commodity prices are likely to skyrocket. Gold-mining companies could benefit greatly from rising commodity prices and so too could their shares!
Centamin (LSE:CEY) is a FTSE 250 stock currently showing strong gains – it’s up 80% from its March low. Centamin says its Sukari mine in Egypt is fully operational. It has been unaffected by the coronavirus outbreak and there are enough workers and supplies to last into the third quarter – when global travel restrictions are expected to ease.
It is currently providing a dividend at a 4.4% yield of the current price (186p). This passive income can be re-invested and bolster your growing portfolio.
Anglo American (LON:AAL) dream Another FTSE mining company, Anglo American (LSE:AAL) produces platinum as well as other metals and minerals needed for industry. It is currently selling under 10-times earnings, with a current ratio just under 2.
EBITDA has increased consistently since 2015, when crashing commodity prices precipitated a loss. The company has cleaned up since then, trimming down the total number of mines it operates and cutting costs – whilst increasing revenues. Improvements in cost control and productivity, along with better prices has done wonders for profits and cash generation. Which is reflected in the balance sheet too – debt’s down from $12.9bn in 2015 to $4.4bn today.
Get The App
The stock is fairly expensive at 1,573p, so the amount you should purchase depends on the total amount you are willing to invest. Mining stocks aren’t very glamorous, but that doesn’t mean they won’t add a shine to your diversified portfolio!
The post £5k to invest? I’d add these cheap FTSE stocks to my portfolio now appeared first on The Motley Fool UK.
Toby Aston has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.
Motley Fool UK 2020
First published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.