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Down 25%, I think Warren Buffett would love these FTSE 100 bargains!

Warren Buffett at a Berkshire Hathaway AGM

Warren Buffett has a nose for a bargain. The Berkshire Hathaway chair likes to demonstrate the benefits of value investing at every opportunity.

One of his famous maxims is to “be fearful when others are greedy, and greedy when others are fearful.” This strategy has made the legendary investor a personal fortune north of $100bn.

His strategy doesn’t just apply to when stock market crashes happen however. He’s always on the hunt for top stocks that are trading below value.

These two UK shares all look ultra cheap following recent share price falls. Here’s why I think he would like them.

Vodafone Group

Buffett has exposure to the telecoms industry through his holdings in Charter Communications and T-Mobile. One reason could be because of these companies’ tremendous competitive advantages (or ‘economic moats’, as he calls them).

It isn’t easy to set up a telecommunications network that spans continents. It’s also expensive. As a consequence, companies like this have considerable protection from the threat of new entrants.

It’s a quality that FTSE 100 share Vodafone Group (LSE:VOD) also obviously enjoys. It has a vast broadband and mobile network spanning Europe and Africa. The company also operates a growing mobile money operation in the latter territory.

As I say, keeping telecoms infrastructure up and running is a costly business. This can have a big impact on profits and cash flows and, by extension, on the dividends such firms pay to investors.

But despite this constant risk, I think Vodafone is a good investment. Businesses like these have an increasingly important role to play as the digital revolution continues. I like this particular operator as well, given its exposure to fast-growing African markets.

Vodafone’s share price has slumped 25% in the year to date. It’s a decline that leaves it trading on a forward price-to-earnings growth (PEG) ratio of 0.8, below the value benchmark of 1.

Coca-Cola HBC

Coca-Cola HBC (LSE:CCH) is another fallen FTSE index share I think Buffett would love. In fact the ‘Sage of Omaha’ has owned shares in US-listed The Coca-Cola Company since the 1980s.

Coca-Cola HBC bottles and sells the drinks of the North American beverages giant. Therefore it also benefits from the terrific brand power of popular products including Coke, Fanta and Sprite.

Brand recognition is also an important quality for Buffett. It gives companies a big advantage over rival businesses and provides terrific pricing power. This allows them to grow profits by raising prices, even when broader economic conditions are tough.

This is why the Berkshire Hathaway boss also owns shares in food giant Kraft Heinz and tech giant Apple.

Like Vodafone, Coca-Cola HBC’s share price has also fallen by around a quarter since the start of 2022. It’s true the company is under pressure from high cost inflation but, at current prices, I’m seriously considering raising my own stake in the business.

The post Down 25%, I think Warren Buffett would love these FTSE 100 bargains! appeared first on The Motley Fool UK.

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Royston Wild has positions in Coca-Cola Hbc Ag. The Motley Fool UK has recommended Apple and Vodafone Group Public. 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.