UK share prices have staged a mild bounceback following last week’s mini stock market crash. The FTSE 100 is up 1.1% on Monday so far, recovering from its biggest fall for almost 18 months on Friday. Investor confidence is steadying following early signs that the new Omicron Covid-19 variant might not be as lethal as previously feared.
Studies into this new coronavirus strain remain in their very early stages, however, and market sentiment remains ultra fragile. Even the slightest negative news on Omicron could easily prompt a fresh stock market crash. So is now the time for me, as a UK share investor myself, to sit it out and wait for the situation to become clearer?
Not a chance! Last week’s mini crash saw plenty of top-quality UK shares sink in price, proving a decent dip buying opportunity for braver investors. As a long-term investor I’m not concerned about the prospect of some more share price choppiness. In fact right now I’m looking for the best FTSE 100 bargain stocks to buy following recent falls.
2 cheap FTSE 100 shares I’d buy after the crash
Here are two dirt-cheap FTSE 100 stocks I’m considering loading up on today:
#1: Persimmon
There’s been some chilling news coming out of the UK homebuilding sector in recent days. First HMRC warned last week that home sales had fallen 52% month-on-month in October as Stamp Duty fees came back into force. Then the Bank of England today said that mortgage approvals had dropped to its lowest since mid-2020 last month.
This casts a shadow over the builders like Persimmon (LSE: PSN) for next year. But I don’t think these falls have knocked the allure of housing stocks like this. Such meaty month-on-month falls were expected following the reintroduction of Stamp Duty. Its my opinion that conditions will remain extremely robust for Persimmon and its peers as mortgage products should remain ultra-affordable and government support for first-time buyers will still be there.
Today Persimmon trades on a price-to-earnings (P/E) ratio of just 10.2 times for 2022. It carries a mighty 8.8% dividend yield too. I think these figures are too good to ignore.
#2: JD Sports Fashion
JD Sports Fashion (LSE: JD) doesn’t offer the sort of all-round value as Persimmon. Its dividend yield sits at a miserly 0.3% for this fiscal year (to January 2022). Still, I think a mega-low price-to-earnings growth (PEG) ratio of 0.4 more than makes up for this. It’s well inside the widely-regarded bargain benchmark of 1 and below.
It’s possible that demand for JD’s leisurewear could sink if economic conditions worsen and consumer spending comes under pressure. In my opinion, though, this danger is offset by the bright outlook for the athleisure segment. People still need to fork out money to clothe themselves during good times and bad. And fortunately demand for comfortable sportswear looks set to keep growing strongly.
I’m also confident JD Sports’ special relationships with leading brands like Nike and Adidas should allow it to traverse the problem of massive competition. Such relationships have helped make the FTSE 100 retailer the place to go for all things athleisure as it’s allowed JD to stock hot product lines that can only be found on its shelves.