2 cheap FTSE 100 shares to buy

macro shot of computer monitor with FTSE 100 stock market data in trading application

Packaging giant DS Smith (LSE: SMDS) is a FTSE 100 share I already own. This is a UK company whose acquisition-led growth strategy has paid off handsomely over many years. And it’s one whose future looks increasingly bright as e-commerce activity takes off and it invests to produce more sustainable products.

I’m contemplating buying more DS Smith shares following this week’s latest trading statement. In it, the company said that “box volumes have grown very strongly” since 1 May. This was versus both the corresponding 2020 and 2019 periods. Furthermore, growth has been witnessed across the entire group, with trading especially strong in the US and Southern Europe.

Too cheap to miss?

Less encouraging is news that DS Smith is having to endure rising paper, energy and transport costs. Such problems have the capacity to put a significant squeeze on margins. Still, soaring demand for its boxes still makes this business an exciting investment opportunity, in my book. And particularly at current prices of around 450p per share.

Not only does the FTSE 100 firm trade on a rock-bottom forward price-to-earnings growth (PEG) ratio of 0.5 today, but the boxbuilder boasts an inflation-mashing dividend yield of 3.3% as well.

Riding the nickel train

Soaring aluminium prices have been in the news a lot recently. But it’s not the only base metal that’s jumped in value. Nickel, for instance, has just rocketed to seven-year peaks, above $20,000 per tonne as concerns over metal supplies worsen. Nickel stocks held in Shanghai Futures Exchange warehouses have also just struck record lows.

I think the long-term outlook for nickel prices looks very promising. And this could be good for Glencore (LSE: GLEN), the fourth largest nickel producer on the planet. Global construction activity looks set to rise robustly over the medium-to-long term (GlobalData thinks the industry will grow 5.7% in 2021 and at an average of 3.7% between 2022 and 2025). This bodes well for nickel producers as around two-thirds of metal consumption is used in stainless steel production.

What’s more, nickel is an essential component in the batteries that power electric vehicles (EVs), meaning Glencore’s stands to gain from the green revolution affecting the automotive industry. Incidentally, the FTSE 100 share is also a major producer of copper, cobalt, zinc and lead, other metals which are used extensively in EV manufacturing.

Another FTSE 100 bargain!

Glencore is a classic cyclical share, meaning its profits are linked closely to the performance of the broader global economy. So signs of a slowdown in the recovery (and particularly inside commodities-hungry China) should come as a worry to the company.

Still, in my opinion, this threat is baked into Glencore’s share price at current levels. At 330p per share, it trades on a forward price-to-earnings (P/E) ratio of just 8 times. With the FTSE 100 stock also carrying a meaty 4.5% dividend yield, it offers the sort of all-round value I love.

The post 2 cheap FTSE 100 shares to buy appeared first on The Motley Fool UK.

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Royston Wild owns shares of DS Smith. The Motley Fool UK has recommended DS Smith. 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.

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