3 high potential FTSE 100 shares that I would buy
The continued dynamism of the stock market is excellent for investors. Especially after the crash of last year, there is nothing quite like seeing the value of my investments increase steadily. But it’s not just the value of my portfolio that’s increasing. Price FTSE 100 the stocks I would like to buy are also up. As a result, I often find myself worrying that I didn’t buy at the right time.
But I’m encouraged that there are still stocks with strong upside potential. And by potential, I mean that the evolution of their stock price does not match their financial strength or outlook. For this reason, I think it’s only a matter of time before they start to go up.
Here are three of those FTSE 100 actions.
# 1. Associated British Foods: retail trade reopens
When retailers reopened in April, Primark owner Associated British foods said the store opening had passed “fantastically good”. In my opinion, this was an encouraging statement as the retail brand is ABF’s main source of income. Last year was a setback because Primark the stores have been closed and the brand does not sell online.
On top of that, its other segments like grocery, agriculture, and ingredients performed well. If they continue to perform and retail catches up as well, it could be a good year ahead for ABF.
But its share price has gone nowhere for the past three months. Its increase over the past year has also been reduced to 16%.
# 2. Tesco: strength online
Sales to Tesco have slowed down recently compared to last year. But that was to be expected, because 2020 was an atypical year. Instead, if I consider its growth from 2019, it’s pretty strong. In addition, its online sales posted double-digit growth. With digital sales increasingly likely to be the future, Tesco is in a good position, I think.
However, his the share price has fallen 3% on the update. In fact, it has been flat for a long time. I think that will change though, as the economy accelerates and its own growth is sustained.
# 3. Lloyds Bank: macro concerns for FTSE 100 bank
The rally in bank stocks has been held back in part because regulations have kept dividend levels low and in part because the economy is not yet fully on its feet. This is evident in the Lloyds Bank share price. Although its stock price has practically doubled since the stock rally started last November, it is still well below the levels it started at in 2020.
But I think that can change. Lloyds’ latest results are strong, thanks to the fact that bad debt provisions have declined. They will also be allowed to pay higher dividends over time. I think its share price will start to rise then.
Manika Premsingh has no position in the mentioned stocks. The Motley Fool UK recommended Associated British Foods, Lloyds Banking Group and Tesco. The opinions expressed on the companies mentioned in this article are those of the author and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that considering a wide range of ideas makes us better investors.