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Since the beginning of this year, the London Stock Exchange has been on shaky grounds with rising inflation and interest rates, the latest being the Russia-Ukraine crisis. But the current situation can be used as an opportunity to shift your investment from growth stocks to value stocks. The London Stock Exchange has many value stocks under its roof.
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Since Russia invaded Ukraine on 24 February, stock markets across the world have been highly volatile and have pushed many London-listed stocks below their fair value. These stocks are known as value stocks as they trade for relatively cheap valuations relative to their fundamentals, such as earnings, sales, dividends, and long-term potential. Value stocks generally have long-term return potential as compared to growth stocks because of underlying risk due to the skeptical attitude the market has towards them.
The point of value investing is to invest in stocks that are trading at discount to their intrinsic value or book value and sell them to make a profit when their prices rise. There are multiple metrics to find a value stock such as Price-to-earnings (P/E) ratio, Enterprise-value-to-EBITDA (EV/EBITDA) ratio, Price/earnings to growth (PEG) ratio, and Price-to-book (P/B) ratio.
Let us take a look at five value stocks, including Ferrexpo Plc, Petra Diamonds Ltd, OSB Group Plc, TBC Bank Group Plc, and Royal Mail Plc, that you may consider adding to your portfolio after your own research.
Ferrexpo Plc (LON: FXPO)
Ferrexpo is a Swiss-based commodity trading and mining company with market-cap of £1,001.25 million as of 25 March 2022. The company is an FTSE 250 constituent, and its P/E ratio and EV/EBITDA ratio stood at 1.26x and 0.78x, respectively. Ferexpo Plc’s share hasn’t performed well, as it has delivered a negative return of -55.38% to its shareholders over the last one year, and its year-to-date return stands at -43.05% as of 25 March 2022.
At 8:10 AM (GMT), Ferrexpo Plc’s shares were trading at GBX169.90, up by 0.29%, as of 25 March 2022.
Also Read: Is it a good time to invest in Next (LON: NXT) shares?
Petra Diamonds Ltd (LON: PDL)
Petra Diamonds Ltd is a diamond mining company with focused mines in South Africa and Tanzania. The company is listed on the FTSE All-share Index with a market cap of £231.10 million as of 25 March 2022. Its P/E ratio and EV/EBITDA ratio stood at 0.93x and 2.48x, respectively. Petra Diamond’s share has performed well, as it has delivered a return of 70.21% to its shareholders over the last one year and its year-to-date return stands at 62.16% as of 25 March 2022.
At 8:10 AM (GMT), Petra Diamond’s shares were trading at GBX120.00, up by 0.84%, as of 25 March 2022.
2022 Kalkine Media®
OSB Group Plc (LON: OSB)
OSB Group is a specialist mortgage lender and retail saving company, with a market-cap of £2,456.24 million as of 25 March 2022. The company is a FTSE 250 constituent, and its P/E ratio and EV/EBITDA ratio stood at 7.29x and 0.23x, respectively. OSB Group Plc’s share has performed well, as it has delivered a negative return of 26.14% to its shareholders over the last one year, while its year-to-date return stands at -0.18% as of 25 March 2022.
At 8:10 AM (GMT), OSB Group Plc’s shares were trading at GBX553.50, up by 1.10%, as of 25 March 2022.
TBC Bank Group Plc (LON: TBCG)
TBC Bank Group Plc is a parent company of TBC Bank and operates through segments including Retail banking, corporate banking, and small and medium enterprises (MSME) banking. The company is listed on the FTSE 250 Index with a market-cap of £573.62 million as of 25 March 2022. Its P/E ratio and EV/EBITDA ratio stood at 3.04x and 1.06x, respectively. TBC Bank Group’s shares’ value has fallen in the recent past. It has delivered a negative return of -2.97% to its shareholders over the last one year, and its year-to-date return stands at -36.73% as of 25 March 2022.
At 8:10 AM (GMT), TBC Bank Group’s shares were trading at GBX1,048.00, up by 0.77%, as of 25 March 2022.
Also Read: Verditex, Good Energy Group: Stocks you may buy with VAT cut on green solutions
Royal Mail Plc (LON: RMG)
Royal Mail Plc is a global postal service and courier company, with a market cap of £3,452.81 million as of 25 March 2022. The company is an FTSE 100 constituent, and its P/E ratio and EV/EBITDA ratio stood at 4.14x and 2.48x, respectively. Royal Mail Plc’s share has performed well, as it has delivered a negative return of -28.68% to its shareholders over the last one year, while its year-to-date return stands at -28.68% as of 25 March 2022.
At 8:10 AM (GMT), Royal Mail Plc’s shares were trading at GBX360.70, down by 0.11%, as of 25 March 2022.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
