UK share investing: should I buy these 3 FTSE 100 stocks in my ISA?

Barratt Developments (LSE: BDEV) is a UK share I already own in my Stocks and Shares ISA. But its current valuations are tempting me to increase my holdings.

City forecasts can of course be blown off course. But today the FTSE 100 housebuilder is predicted to enjoy a 60% earnings rise this fiscal year (to June 2021). This leaves Barratt trading on a bargain-basement forward price-to-earnings growth (PEG) ratio of 0.2. Any reading below 1 can suggest that a stock’s being undervalued by the market.

It’s possible that the tough economic conditions in Britain could weigh on home sales in the short term. This, along with the withdrawal of Stamp Duty, might well cause that profits forecast to miss. I’d still buy this UK housebuilding share as Britain’s insufficient supply of new homes looks set to run and run. I think this could help offset any demand dips Barratt experiences in the near future. And it might deliver meaty shareholder returns over the next decade too.

A falling FTSE 100 star

I wouldn’t want to invest my hard-earned cash in fellow FTSE 100 member Tesco (LSE: TSCO) though. It’s true that a further shedding of its foreign assets in December will enable it to focus more efficiently on building back its market share in Britain. But there are still significant competitive threats that threaten this UK share’s long-term growth outlook.

Asda is the latest major supermarket to threaten Tesco and, more specifically, its dominance of the lucrative online channel. The business this week announced massive restructuring that will see it take on 4,500 staff solely for its Internet operations. Asda hopes it will help bring 1m online orders a week by the end of 2021. Tesco’s fight to keep revenues on an upward path has got that little bit more difficult. And this could heap even more pressure on the retailer’s ultra-thin profit margins.

A top UK recovery share

I’d be happier to buy International Consolidated Airlines Group (LSE: IAG) for my ISA. This UK share could be a big winner as Covid-19 restrictions are steadily unwound. As Bank of America recently commented: “IAG appears well placed to gain share on the Transatlantic routes, given capacity cuts from competitors and its planned acquisition of Air Europa”. Airline collapses across Europe will boost the FTSE 100 flyer in the fast-growing low-cost travel segment as well.

There’s a couple of important caveats to remember, though. IAG’s balance sheet will come under further pressure if Covid-19 mutations cause travel restrictions to be extended. It’s also possible that the anticipated rebound in consumer spending might end up being a damp squib. Jonathan Haskel, a member of the Bank of England’s rate-setting committee, this week highlighted a survey that suggested almost three-quarters of Brits will hang onto the savings they built up during lockdowns.

A decision to limit spending on holidays and other non-essential things would clearly have a significant impact upon IAG. That said, I still think the British Airways owner could prove to be a great long-term investment.