Since the Covid-19 stock market crash, many FTSE 100 shares have rebounded sharply. Plenty of stocks are still well below their 52-week highs though. This suggests there could be further gains to come, assuming the market doesn’t crash again.
With that in mind, here’s a look at three cheap FTSE 100 shares that I believe look attractive right now.
The CEO is buying here
One that seems very cheap to me right now is Mondi (LSE: MNDI). It’s a leading packaging company that has a focus on sustainable packaging solutions. It sports a P/E ratio of just 11.9, using next year’s consensus earnings per share (EPS) forecast of €1.38.
There are a number of things I like about Mondi. Firstly, the company has exposure to growth industries, such as e-commerce. Secondly, the group is committed to sustainability. Third, it’s a highly profitable company. Over the last five years, return on capital employed – a key measure of profitability – has averaged about 18%.
One thing that’s caught my attention here is that CEO Andrew King has purchased MNDI shares recently. On 29 June, the insider purchased 15,000 shares at a price of £14.96 per share, boosting his holding by nearly 200%. This suggests King believes the FTSE 100 stock is undervalued.
All in all, I think Mondi shares look very attractive right now.
This FTSE 100 company is still paying dividends
Another FTSE 100 share that I think looks cheap right now is M&G (LSE: MNG), the asset management business that was demerged from Prudential last year. It currently trades on a forward-looking P/E ratio of 8.2 using this year’s consensus EPS forecast.
In late May, M&G issued an encouraging business update. Not only did the company advise it’s in a position of financial strength, but it also said it would pay out dividends to investors as previously announced. I’m impressed by its commitment to its dividend, given that so many FTSE 100 companies have suspended, or cancelled, their dividends this year.
Like Mondi, M&G has also seen some bullish insider transaction activity recently. Back in March, a number of top-level insiders purchased shares, including the CEO, CIO, and chairman. That’s a positive development, in my view.
Overall, I see plenty of appeal in M&G. I see the stock as a buy right now.
A FTSE stock for the sustainable revolution
Finally, I also like the look of Johnson Matthey (LSE: JMAT) at the moment. It’s an under-the-radar FTSE 100 company that specialises in sustainable technologies, including batteries for electric vehicles and catalytic converters. Its share price is down about 30% this year and the stock currently trades on a forward-looking P/E ratio of about 13.4.
Johnson Matthey has been hit hard by Covid-19. Recently, the group announced it booked a £60m charge related to the outbreak and said it would cut 2,500 jobs to cut costs. It also cut its dividend by 50%, bringing an end to its very impressive dividend growth track record (20+ years).
I expect the FTSE 100 company to recover though. In a world that’s becoming increasingly focused on sustainability, Johnson Matthey looks well-positioned to succeed. As green technologies are increasingly embraced, the company should benefit.
I’d snap up this cheap FTSE 100 stock while it’s out of favour.