Investing £3k, or any other amount, after the recent stock market crash, may not sound like a great idea to some investors. However, for long-term investors, now could be a suitable moment to buy a range of FTSE 100 bargains.
As such, here are three FTSE 100 bargains I’d buy with £3k today.
FTSE 100 bargains on offer
Johnson Matthey (LSE: JMAT) is a unique business. The company is one of the world’s largest suppliers of catalysts to reduce emissions from vehicles. Its also manufactures pharmaceutical ingredients and chemicals.
While the coronavirus crisis will hurt demand for its core products, Johnson’s reputation should help the company come out on top in the long term. These are not the sort of products where it’s easy to change suppliers overnight. The group operates in highly regulated and policed industries. This should ensure that when the global economy returns to growth, customers return.
Nonetheless, despite Johnson’s market position, the shares in the business are currently trading close to a 10-year low. As FTSE 100 bargains go, the stock appears to offer a wide margin of safety at current levels.
With this being the case, now could be the right time to buy a slice of the business, despite the fact it’s facing unprecedented operating conditions.
Rising sales
When it comes to FTSE 100 bargains, I think Morrisons (LSE: MRW) also deserves your research time. Shares in the retailer have fallen by around 5% since the beginning of the year.
However, this doesn’t seem to reflect the training conditions the business is currently facing. All of its peers have reported better than expected growth during the first few months of 2020.
Higher costs have offset some of this growth, but overall, the UK’s largest food retailers appear to be faring well in the current crisis, unlike other FTSE 100 bargains.
Morrisons is also pursuing other initiatives to drive growth. These include expanding its wholesale division. The company is on track to meet management’s target of £1bn in annual wholesale revenue. That should help improve the group’s expansion potential over the long run.
Therefore, now could be a good time for investors to snap a share of this business. The company appears to be navigating near-term challenges quite well and is investing for the long run at the same time.
Global growth
As FTSE 100 bargains go, Vodafone (LSE: VOD) is in a league of its own. The coronavirus crisis has led to a surge in working from home, putting unprecedented demand on global telecommunication networks.
After investing tens of billions of euros in its networks over the past few years, Vodafone’s operations have been able to handle the increased demand quite easily. As a result, it seems highly likely the business will pull through the crisis. It could also come out in a stronger position if its performance helps it capture market share from competitors.
Historically, the company has paid out most of its income to shareholders via dividends. It seems likely that this will continue.
While Vodafone has much debt, it also generates quite a significant amount of cash. Now that it has completed its big investment programmes, management has much more flexibility with regards to cash returns.
At the time of writing, the stock supports a dividend yield of 6%, which seems appealing compared to other FTSE 100 bargains.
