Investors seeking cheap shares to buy in March will find plenty of choice on today’s FTSE 100. They don’t need to be super wealthy either. It’s possible to start with £2,000, £1,000 or less. So which stocks might investors consider?
The UK’s blue-chip index has retreated in recent days, although it’s still up more than 5% this year, and around 13% over 12 months. Plus dividends on top.
The recent dip excites rather than alarms me. It means many top FTSE shares are cheaper than just a few days ago. So what’s out there?
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Some FTSE 100 bargains to consider
Some shares are cheap because they have fallen sharply lately. Trainer specialist JD Sports Fashion has a lowly price-to-earnings ratio of just 6.7, less than half the FTSE 100 average of around 15.
That’s unsurprising given that its shares are down 30% over the last year. British Airways owner IAG is also cheap with a P/E of 7.8 times. By contrast, its shares are up 113% over the last year.
I think investors should approach with caution. JD Sports is struggling to kick on, as consumer demand remains weak. The IAG share price may have burned itself out, following its stellar run.
Barclays (LSE: BARC) seems well worth considering though. Its shares are up 83% over the last 12 months, but may have a bit more fuel in the tank.
Again, they’re pretty good value, with a P/E of 8.3. The price-to-book (P/B) ratio, a measure I always check with banking stocks, is low at 0.6. That makes it cheaper than rivals Lloyds Banking Group and NatWest, which both have P/Bs of 0.9.
Barclays also has a thriving investment banking arm, having resisted pressure to dump it after the financial crisis. That should benefit from stock market volatility, which I expect we’ll see a lot more of under US President Donald Trump.
The shares look decent value
On 13 February, Barclays reported a 24% surge in pre-tax profit to £8.1bn in 2024, slightly above broker forecasts. It also hiked its dividend by 5% and announced a new £1bn share buyback.
There are risks to buying Barclays, as with every stock. As interest rates slide, it could squeeze net interest margins, the difference between what it pays savers and charges borrowers. Its Wall Street operations leave the bank at the mercy of aggressive US regulatory scrutiny, where it could face lawsuits or hefty misconduct fines.
Like IAG, the Barclays share price may struggle to extend its stellar run. Yet I still think it’s good value and worth considering.
Specialist insurer Beazley is a dark horse. It looks really cheap with a P/E of just 5.2, despite a 27% jump in its share price over the last 12 months. Beazley is exposed to climate risk. Last November it revealed an estimated a hit of up to $175m from Hurricanes Helene and Milton.
Telecoms giant BT Group also looks cheap with a P/E of 8.3 times and a generous 5% yield. Investors should research the risks here, as there are loads. British American Tobacco is another cheapie. Its P/E is also 8.3 with a bumper 7.8% yield. An investor with £2k could think about splitting it between Barclays and one of these three. Those with larger sums should consider spreading their money around.
