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The FTSE 100‘s a great place for global investors to hunt for cheap growth shares. Years of economic and political uncertainty means that many UK blue-chips have underperformed their overseas peers.
The Footsie has leapt in value recently, even hitting new record highs. But the fact remains that tons of top stocks still trade on rock-bottom earnings multiples that are tough to believe.
Here are two I believe value investors might consider too cheap to miss.
Fizzy sales
Coca-Cola Hellenic Bottling Company‘s (LSE:CCH) a bargain share I’ve simply added to my Self-Invested Private Pension (SIPP).
It’s risen strongly in latest weeks, helped by one other good set of buying and selling numbers that beat forecasts. The Coke, Sprite and Fanta bottler reported a 12.6% rise in natural revenues within the first quarter. That was nicely above a sub-10% predicted enhance.
But right this moment it nonetheless appears to be like grime low cost. Earnings are predicted to soar 27% yr on yr in 2024. This leaves Coca-Cola HBC shares buying and selling on a ahead price-to-earnings progress (PEG) ratio of 0.5. Any studying beneath 1 suggests a inventory’s undervalued.
It’s not all plain crusing for the corporate. In truth, a gentle slide within the euro poses a rising menace as eurozone rates of interest reverse and political turbulence within the buying and selling bloc will increase.
The corporate reviews in euros, exposing it to translation danger when earnings from non-eurozone areas are transformed into Europe’s single foreign money.
But on steadiness, I nonetheless imagine the FTSE 100 firm’s a prime funding right this moment. Growing and rising markets gross sales proceed to surge, up 12.5% and 19% within the first quarter respectively. This pattern’s tipped to hold on as wealth ranges in these areas quickly rise.
CCH’s good report of innovation additionally bodes nicely because it continues product launches throughout its markets. Monster Power, one in every of its fastest-growing drink manufacturers, launched Inexperienced Zero Sugar in 16 extra markets final quarter alone, as an example.
Financial institution on it
Banking big HSBC Holdings (LSE:HSBA) additionally has an unlimited rising market footprint. In truth, it’s doubling down on these progress areas by promoting Western belongings and reallocating capital to Asian financial hotspots like Hong Kong, Singapore and Mainland China.
Okay, it’s a method that carries danger within the close to time period. The Chinese language economic system’s nonetheless struggling following the pandemic which, in flip, is inflicting ripples throughout the area.
Nevertheless, it might be argued that the following risks to HSBC’s earnings are baked into its share value. The financial institution trades on a low price-to-earnings (P/E) ratio of seven.1 instances.
Metropolis analysts definitely suppose HSBC’s earnings will proceed to rise strongly regardless of China’s troubles. A 9% year-on-year enhance is predicted for 2024.
That is maybe no shock. In the intervening time, the broader Asia Pacific economic system’s tipped to proceed increasing at a wholesome tempo (the IMF, as an example, predicts GDP progress of 4.5% this yr). So demand for banking merchandise is more likely to proceed rising from present low ranges.
In truth, modest product penetration means HSBC can anticipate to strongly develop gross sales considerably over the subsequent decade. I don’t suppose that is presently mirrored within the firm’s bargain-basement valuation.
