WPP’s (LSE: WPP) reconstruction in the post-Martin Sorrell era has been pretty impressive, so far. Soaring advertising spending in 2021 following last year’s washout has, of course, helped. But news coming out of the FTSE 100 ad agency shows it has beaten expectations by a long chalk. Latest financials showed like-for-like revenues up 15.7% between July and September, much better than an anticipated sub-10% increase.
I’ve always liked WPP because of its huge geographic footprint and its excellent relationship with global blue-chip companies. And I’m encouraged by the agency’s drive to boost its position in the fast-growing digital advertising arena. WPP’s strong balance sheet means it has the firepower to realise its goals too. Earlier this month, it sealed a deal to bring branding and design agency Made Thought into its stable.
Too cheap to miss?
Today, WPP trades on a forward price-to-earnings growth (PEG) ratio of 0.9. This is inside the widely-regarded benchmark of 1 and suggests a stock could be undervalued. Okay, the FTSE 100 firm’s profits would take a hit if the global economy dives and advertising and marketing go for a bath.
However, for the moment, the outlook for ad-related expenditure looks rock solid. And although WPP’s ultra-low valuation reflects the possibility that earnings forecasts might disappoint, I’d happily buy it today.
A FTSE 100 hero I already own
I already own Ashtead Group (LSE: AHT) shares in my investment portfolio. At current prices, I’m thinking of loading up on some more. Today, the rental equipment play trades on a PEG ratio of just 0.6 for this fiscal year (to April 2022).
Profits at Ashtead have roared back into life this year as the construction industry has picked itself up off the floor. Fresh financials this month showed rental revenues leap 20% in the six months to October, much higher than City analysts had been predicting. Like WPP, Ashtead lifted its full-year expectations in response.
The best blue-chip of the 2010s
I’ve long been a fan of Ashtead and its acquisition-led strategy which has made its Sunbelt brand an industry titan in the US. So has the broader market, which is why Ashtead was the best-performing FTSE 100 stock of the 2010s. According to Refinitiv, someone who invested £1,000 in the business at the start of 2010 would have made a fatty £35,611 by December 2020.
So as an investor myself I’m pleased Ashtead is showing no signs of slowing on the acquisitions front. The rental giant’s spent $748m on M&A since the start of May, with an outlay of $320m in the current quarter alone. The company’s robust balance sheet means it’s been able to invest heavily in its existing operations too. Capital expenditure has totalled around $1.2bn in the financial year to date.
Profits at Ashtead could suffer if President Biden fails to get his infrastructure bill in the US passed. They could also take a hit if supply chain issues persist. Still, all things considered, I think this remains a top FTSE 100 share to buy right now.
The post 2 of the best cheap FTSE 100 shares to buy for 2022! appeared first on The Motley Fool UK.
5 Stocks For Trying To Build Wealth After 50
Markets around the world are reeling from the coronavirus pandemic…
And with so many great companies still trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.
But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.
Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…
You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.
That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.
Click here to claim your free copy of this special investing report now!
More reading
- 3 FTSE 100 stocks I wish I’d bought in 2021
- 2 FTSE 100 stocks I wish I had bought early in 2021
- 2 top FTSE 100 shares I’m buying before 2022
Royston Wild owns Ashtead Group. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
