FTSE 100 stocks are STILL too cheap! Here’s one to consider buying today

FTSE100 stocks rise as confidence returns to the London stock market. Hopes of an imminent rise in interest rates and an improvement in the UK economy have boosted demand for UK stocks.

But that’s not all.

Analysts have suggested for some time that UK stocks are too cheap compared to their international counterparts. It appears that the market is gradually coming around to this idea, leading to strong demand especially from value investors.

The FTSE is still cheap!

Footsie is up 9% since the start of the year. Yet, despite these gains, the UK market is always undervalued compared to other foreign indices. According to Hargreaves-Lansdownit trades at a whopping 43.5% discount to the US.

Emma Wall, head of investment analysis and research at Hargreaves, is adamant that investors should take the opportunity to buy UK shares today.

She says that “now is the time to invest in the UK,” noting that “it is home to many world-class businesses, selling their goods and services around the world, who do not rely solely on the strength of the British economy to thrive..”

This is what I do

This is a point of view that I wholeheartedly share. That’s why I’ve been buying more FTSE 100 shares in my self-invested personal pension (SIPP) in recent weeks. Major additions include Ashtead Group, Legal and general groupAnd CRH.

And I’m looking for other great value stocks to add to my portfolio. But which ones seem too cheap to miss? Here’s one I think smart stock pickers should consider today.

A title of first value

Vodafone Group (LSE:VOD) still has a lot of work to do to turn around its fortunes in Germany. The company is faced with this following the introduction of new laws on the consolidation of services.

But I think this challenge is linked to the telecommunications giant’s low valuation. Today, it trades on a forward price-to-earnings (P/E) ratio of 10.1 times.

It also trades on a price-to-book (P/B) ratio of 0.4. A score below 1 suggests that a stock is undervalued relative to the value of its assets.

The story continues

Finally, Vodafone shares offer a dividend yield of 7.2%, reinforcing the stock’s position as an exceptional value.

That’s what I like

I think the communications and mobile money provider has tremendous long-term investment potential. I expect profits to skyrocket around the world in this era of increasing digital transformation.

I am particularly excited about its prospects in Africa. I think the skyrocketing population and increasing personal income could push group income to the next level.

With the economic outlook also improving, City analysts expect the Vodafone share price to rise sharply from current levels of 77.2p.

15 analysts currently have ratings on the FTSE stock. And the average 12-month price target among them stands at 93.1p per share. This represents a premium of around 21% over current levels.

All things considered, I think the Vodafone share price could be one of the best bargains in the UK stock market.

Post FTSE 100 stocks are STILL too cheap! Here’s one to consider buying today appeared first on The Motley Fool UK.

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Royston Wild holds positions in Ashtead Group Plc, Crh Plc and Legal & General Group Plc. The Motley Fool UK recommended Hargreaves Lansdown Plc and Vodafone Group Public. The opinions expressed about 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 broad range of information makes us better investors.

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