Stock market crash: I’d buy these 2 cheap FTSE 100 shares today to get rich and retire early

These two FTSE 100 (INDEXFTSE:UKX) shares could offer good value for money, in my view, after the recent stock market crash.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The stock market crash has caused many FTSE 100 shares to trade on valuations that could make them attractive for long-term investors. Certainly, it may take some time for them to recover due to the weak economic outlook. But the index’s track record of recovery suggests that now could be an opportune moment to buy a range of high-quality businesses.

With that in mind, here are two large-cap shares that have declined heavily so far in 2020. Buying them today could boost your portfolio’s returns, and may even help you to retire early.

Persimmon

FTSE 100 housebuilding business Persimmon (LSE: PSN) has experienced a challenging period, with its construction activities and sales offices being closed for much of the lockdown. As such, its financial performance over the coming months could be disappointing.

Investor sentiment towards the company has, understandably, weakened over the last six months. Since the start of the year, Persimmon’s share price has fallen by 15%. Although further declines cannot be ruled out due to the weak economic outlook, the company’s low share price could suggest that many of the risks it is facing have been priced-in by investors.

With the FTSE 100 business now reopened and it having made progress in strengthening its customer survey results prior to the coronavirus pandemic, it could produce improving financial performance over the long run. Factors such as low interest rates and a low supply of new homes may mean that, over time, Persimmon’s shares deliver a sound recovery. As such, now could be the right time to buy them while they appear to offer a margin of safety.

FTSE 100 retailer Sainsbury’s

Fellow FTSE 100 stock J Sainsbury (LSE: SBRY) has also experienced a difficult six-month period. The lockdown has shifted demand for groceries from stores to online. As a result, the company, along with many of its sector peers, has invested heavily in ramping-up its delivery capabilities.

Although this has caused a rise in its costs, this is set to be largely offset by business rates relief, according to the company’s latest quarterly update. An increasing online presence may help Sainsbury’s to take advantage of ongoing trends towards e-commerce, while its investment in technologies such as self-scanners in its stores could help to reduce its costs and make the business more efficient.

With the FTSE 100 company reporting strong sales growth over the most recent quarter, it could offer a sound growth opportunity in the long run. Although weak consumer sentiment may hold back its share price in the coming months, its online presence and the investment it is making in the digital space could differentiate it from other retail peers. As a result, it could boost your portfolio returns and improve your prospects of retiring early over the long term.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of Persimmon. 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.

More on Investing Articles

Investing For Beginners

Up 31% in a month, could this FTSE 250 stock be getting bought out?

Jon Smith takes a look at speculation that's pushing the share price of a FTSE 250 share higher and considers…

Read more »

Investing Articles

Here’s how I’d follow Warren Buffett to start building passive income in 2025

Ben McPoland highlights one FTSE 250 firm with a strong competitive edge that he thinks can continue rewarding investors with…

Read more »

Investing Articles

Burberry shares: undervalued FTSE gems that are ready to rocket?

Burberry shares soared at the beginning of the week as the takeover rumour mill went into overdrive. Is Paul Summers…

Read more »

US Stock

Here are the latest share price forecasts for S&P 500 giant Amazon

Amazon has generated monster gains for investors over the last decade. And Wall Street analysts believe the S&P 500 stock…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

2 high-yield FTSE 250 shares I’d buy today — and 1 that I’d avoid

UK markets have felt some volatility after last week’s Budget and the FTSE 250 was no stranger to it. Our…

Read more »

Investing Articles

3 reasons the Rolls-Royce share price could soar over the next decade

Sustainable aviation fuel, narrow-body aircraft, and small nuclear reactors could all keep the Rolls-Royce share price climbing over the next…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

Here’s how much income I’d get if I invested my entire £20k ISA in cheap BT shares

BT shares are on the up but still cheap, while the FTSE 100 telecoms stock offers a good yield too.…

Read more »

Investing Articles

2 FTSE dividend shares yielding more than 6% with P/Es of less than 9!

Harvey Jones picks out two brilliant FTSE 100 dividend shares that yield more than 6% but are selling at strangely…

Read more »