I’m always on the lookout for FTSE 100 stocks that are worthy additions to any portfolio.
The index is jam-packed with high-quality stocks that have the ability to provide fruitful returns in times ahead. And as a Fool, this is pivotal for me.
I’ve selected two stocks that look cheap today. But should investors consider them?
Scottish Mortgage Investment Trust
First on the list is Scottish Mortgage Investment Trust (LSE: SMT). I remember in 2020 when the stock boomed, rising by over 100% in a Covid-struck year and hitting an all-time high of over £15. However, today paints a completely different picture, down 15% in the last 12 months and having lost around 50% of its value since then.
It’s safe to say the last few years have taken their toll on Baillie Gifford’s flagship fund. However, I don’t think it’s time to write it off just yet.
At this price, I sense a bargain. To start, the trust is currently trading at an 18.5% discount to net asset value. What this essentially means is that I can access its top holdings such as Tesla and Amazon cheaper than their market rate.
I’m also attracted to Scottish Mortgage given the diversification it offers my portfolio. Through one simple investment, I gain access to nearly 100 companies. As a retail investor, I like the idea of this. What’s more, buying the trust offers me exposure to unlisted shares, with the most exciting of these including Elon Musk’s SpaceX.
There are a few concerns I have with the trust. Given its focus on growth stocks, and with interest rates set to remain at high levels for the foreseeable future, this could impact its performance. Its large weighting to China could also be seen as an issue.
However, I think in the long run its focus on both growth companies and China will bear fruit. In my opinion, Scottish Mortgage would be a smart addition to any portfolio and investors should strongly consider buying the stock.
Barclays
For my next pick, I’m turning my attention to the financial sector and Barclays (LSE: BARC). Unlike Scottish Mortgage, the last 12 months have been positive for the stock, rising over 5%. And I expect it to kick on from here.
Barclays shares look cheap, with a price-to-earnings ratio of just 4.4. This sits significantly below the average of its FTSE 100 peers. To add to that, it also trades on a price-to-book ratio of just 0.34. And to me, this signals there’s ample value to be had with the stock.
Aside from that, I’m also a fan due to its dividend yield. This comes in just north of 5%, which offers investors a smart way to put their money to work and generate a stream of passive income.
It’s been a rough period lately for the bank. Volatility in the sector coupled with an unprecedented macroeconomic environment may see it suffer in the months ahead.
However, as a Fool, I think in years. And with that in mind, I think Barclays shares are capable of providing healthy returns in the long run. I’d be keen to top up my holdings today if I had the cash.
