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I was drawing a watch list for FTSE 100 stocks to buy in the fall and there are plenty to choose from now. I have boiled my choices down to five to buy when I have the money. I am very happy with number three.
My first choice is oil and gas BP. In fact, I can't believe how cheap its shares are right now.
The drop in oil prices is an obvious reason. Brent crude is now down to $73 a barrel, as Chinese demand eases and fears of a US recession grow. After falling 15.76% for the year, shares trade at a cheap multiple of 6.21 times earnings while yielding 5.41%.
BP's share price may move further if the outlook worsens but from a long-term perspective, I think it looks like a can't-miss buy today.
I support JD Sports Fashion to rise to the top
I caught a good giant of buyers Unilever but he can happily buy more. It is recovering after a turbulent period, and should resume its former role as a strong defensive portfolio.
Unilever's share price is up 23.06% year-to-date so it's not as cheap as it used to be, trading at 22.63 times earnings. The yield is very good at 3%. But I think there's plenty of room for earnings growth, which should drive investor rewards.
Now my third choice. My favorite. I bought a coach and a sportswear retailer JD Sports Fashion (LSE: JD) in January, after a surprise profit warning caused by disappointing Christmas sales sent the stock into a spiral.
JD Sports Fasion's share price rose 18% in the week after results published on 22 August showed a strong 2.4% rise in like-for-like sales. The board said it would continue to achieve pre-tax profit guidance of £955m to £1.035bn, while the recent purchase of Alabama-based retailer Hibbett would deepen its US exposure.
On August 25th, I wrote that JD Sports Fasion's shares could be blown after their bubble recovery, so it has been proven. They are down 6.67% in the last week. As a benchmark, the stock is up 7.29% over 12 months. I think this is a good time to fill my stake at a fair price.
The company is well positioned for the future but there are risks, as fears of a recession persist and consumers continue to struggle. Trading at 11 times profits, I can't stand it.
I like to buy unpopular stocks and I would add spirit giant Diageo on my shopping list. Its shares are down 22.98% in 12 months, following a shocking drop in Latin American sales. I'm a little worried that the world is losing its taste for alcohol, but I still think there's an opportunity here.
Finally, I would buy from a high street vendor The next one. Its long-term performance in a troubled sector has been excellent, with shares up 44.3% in one year and 70.12% over five.
They are not very cheap, trading at 15.26 times earnings while the yield is low at 1.46%. But it's a smart company that deserves its place on the list of the top five FTSE 100 stocks to buy. I just wish I had photographed it years ago.
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