The 2020 stock market crash has left many cheap UK shares facing difficult outlooks. As such, investor sentiment is weak and, in many cases, has shown minimal signs of improving.
This situation could present buying opportunities for long-term investors like me. The FTSE 100 and FTSE 250 have excellent track records of recovery from even their very worst bear markets.
With that in mind, here are two FTSE 100 stocks that appear to me to offer good value for money. They may struggle to produce recoveries in the short run due to the challenging economic outlook. But their long-term turnaround potential appears to be relatively attractive.
A sharp decline in the stock market crash
The Barclays (LSE: BARC) share price has declined by around 40% since the stock market crash first started. The bank’s outlook has been negatively impacted by an uncertain economic outlook. Its financial prospects are also likely to be dampened by a low period of low interest rates.
As a result, investor sentiment towards Barclays has come under severe pressure. It now trades on a forward price-to-earnings (P/E) ratio of around 9 using next year’s forecasts. This suggests that investors may have factored in many of the challenges faced by the bank and the wider FTSE 100 banking sector.
The company’s recent updates have shown that it has made progress in areas such as cost reduction and improving its financial standing. This could make it a more resilient and profitable entity in the long run. As such, it may offer recovery potential after falling heavily in the stock market crash.
A cheap UK share with turnaround prospects
British Land (LSE: BLND) is another FTSE 100 share that has fallen heavily since the stock market crash. It is currently down by around 40% since the start of 2020, with lockdown measures putting the financial situations of its tenants under severe pressure.
The company’s recent updates have shown that rent collection and footfall are down significantly within its retail locations versus the same period last year. It also faces the challenge of adapting to a changing retail environment, where buying products online is becoming more popular. Similarly, working from home may mean less demand for its office space.
However, its retail asset sales and strong balance sheet could provide it with the means to deliver improving long-term performance. British Land’s share price now trades at less than 50% of net asset value. This suggests that investors may have priced in declines in the value of commercial property assets, as well as a challenging period for the business.
Therefore, the stock could offer recovery potential following the stock market crash. It may yet experience further challenges as the second lockdown period commences. However, on a long-term basis, improving investor sentiment and a strengthening economic outlook may catalyse its prospects.