Amid the stock market crash, I’ve been looking for FTSE 100 bargains to add to my portfolio. Here are three companie I’d buy after recent declines.
Stock market crash bargains
The first I’d buy for my portfolio is Taylor Wimpey (LSE: TW). While shares in this homebuilder have been falling recently, home prices across the UK, and demand for new properties, are only rising. As such, I think this could be an opportunity to buy the stock, as the market’s view of the business becomes disconnected from the fundamentals.
Based on City growth estimates, the stock is trading at a forward price-to-earnings (P/E) multiple of 10.8. In my opinion, that looks cheap. Analysts also believe shares in the company will support a dividend yield of 4.2% in the year ahead. While these are just forecasts at this stage, I think they show the FTSE 100 group’s potential. That’s why I’d buy the stock today.
The two main risks the company faces, however, are higher costs and the potential for a housing market crash. Both of these could hurt profit margins and growth.
FTSE 100 luxury
I’d also add luxury group Burberry Group (LSE: BRBY) to my portfolio of stock market crash bargains. While the company’s latest set of results showed a 10% decline in sales for the group’s most recent financial year, I’m encouraged by the sales figures emerging from other retailers.
Many retails have reported a significant increase in demand for their products as economies have reopened. I think Burberry could experience the same as consumers spend lockdown savings.
Unfortunately, even after recent declines, shares in the company appear a bit pricey. They’re currently trading at a forward P/E of 27. Nevertheless, after factoring in growth projections, the stock is dealing at a PEG ratio of 0.8. A ratio below one indicates an investment offers growth at a reasonable price. Based on these figures, I’d buy the shares for my portfolio of FTSE 100 shares.
The most considerable risk hanging over the stock is that growth won’t live up to expectations. That could lead to an investor exodus. Fashion is an extremely competitive business, which means profits aren’t always guaranteed.
Emerging market growth
Finally, I’d buy Prudential (LSE: PRU) for my stock market crash bargains portfolio. The Asia-focused life insurance and asset management group should benefit from the growing Asian middle class over the next decade.
As consumers across the region become wealthier, the penetration of financial products, such as life insurance, which is already relatively high in Western countries, could dramatically increase. This could help drive Prudential’s growth.
But the company will likely face severe competition along the way. This is the biggest challenge the group now faces, fending off competition while still investing enough to drive growth.
Even after taking these risks into account, I’d buy the FTSE 100 stock for my portfolio today. This is because I think there are only a handful of London-listed companies that offer the kind of exposure to emerging markets as Prudential.
