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Despite being up 7.9% year to date, I still see a lot of deals in it FTSE 100. For years, UK stocks have looked largely neglected compared to their US counterparts. I think investors are finally getting involved.
But even if few people have seen share prices rise this year, there are still good buying opportunities for savvy investors.
With that said, could these two stocks be the best value stocks in the index? I think there is a case to be made. If I had the cash, I would buy both of my portfolios today.
JD Sports Fashion
The first one is JD Sports Fashion (LSE: JD.). Despite the stock being down 2.1% year-to-date, it has been on a remarkable rise lately. Over the past six months, its share price has increased by 42.1%.
With that increase, as the chart below shows, the stock now trades at a price-to-earnings (P/E) ratio of just over 15. That comes in just above the FTSE 100 average of 11. However, we are very low. there is a historical JD average of 23.
JD has struggled over the past few years due to a slowdown in spending. As a result, it issued a profit warning for early 2024 that saw investors rush to get their shares out. In the coming months, this will remain a threat as the cost of living crisis escalates and consumers continue to down the hatches.
But with long-term shopping, I see a lot to like about JD. We are starting to see interest rate cuts, which should hopefully lead to an increase in spending.
In addition, the company has plans to expand in the coming years. As part of this, it opened 216 new stores last year. It also focused on global expansion. That's why it recently acquired the US brand Hibbett. I think the times ahead can be exciting for the company.
Centrica
Shares in the energy powerhouse Centrica (LSE: CNA) and looks like cracking value. Down 16.1% in 2024, as the chart below shows, they have a trailing P/E of 5.6. They also have a forward P/E of 7.1.
The stock was flying until the end of 2023 due to rising energy prices. However, this year has been a real check for business. In its half-year results, it announced that adjusted operating profit fell to just over £1bn. That's half of what it was last year.
That highlights the risk with the stock: it goes in cycles. When energy prices rise, as they have for the past few years, stocks can rise. Similarly, Centrica stock could fall when energy prices fall.
But as a long-term investor, I'm content to hold back a bit if I see long-term potential. With Centrica, I do. That is especially true for its relatively cheap valuation.
Despite the weak performance this year, the business remains on track to meet its full-year expectations. In fact, it is on track to deliver its medium-term profitability two years ahead of schedule.
In addition, the stock has a dividend yield of 3.5%. In addition, it recently announced a £200m share buyback plan.
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