The FTSE 100’s trading near a 52-week high! I’m still looking to buy
After delivering double-digit total returns over the last 12 months, the FTSE 100‘s been on quite an impressive run. And while the UK’s flagship large-cap index has pulled back slightly in recent weeks, it’s still trading towards the upper end of its 52-week range.
Stocks can’t go up forever. And seeing some pullback’s hardly a surprise. Nevertheless, even after its impressive run, there continues to be some terrific buying opportunities for investors to capitalise on right now. That’s why I’m still hunting for stocks to buy, even as the UK stock market reaches new record highs.
Finding bargain stocks
One of the best-performing UK sectors in 2024 so far has been banking. The rise of interest rates has helped restore the profit margins on business and personal loans. And even though rates have started to be cut by the Bank of England, the resurgence of positive sentiment in the financial markets enabled investing divisions to thrive.
With that in mind, it’s not a shock to see banks like Barclays skyrocketing almost 70% since the start of the year. It’s a similar story with NatWest Group, climbing even faster by almost 80% over the same period. And when venturing outside the FTSE 100, Metro Bank‘s putting everyone to shame with a near-130% gain!
With such explosive returns, these banks have become popular portfolio additions in 2024. However, while there continues to be promising long-term potential, I’m sceptical that these are the best buying opportunities right now. After all, the cheap shares are usually the companies that most investors aren’t paying attention to.
Therefore, I’m interested in one particular sector that seems to have fallen completely out of fashion this year – electronics.
Electronic rebound
As inflation climbed worldwide and the cost-of-living crises emerged, demand for consumer electronic devices such as TVs, smartphones, and even electric vehicles (EVs) took quite a tumble. And when paired with inventory overstocking by manufacturers, RS Group (LSE:RS1) saw its revenue and earnings take a heavy hit.
With growth evaporating, the distributor of manufacturing components, including electronics, saw its share price tumble almost 40% since 2022. Obviously, that’s frustrating to see, especially for shareholders. However, looking at some macroeconomic trends, this may soon be set to change.
The manufacturing PMI – the index that tracks global manufacturing demand – has been slowly shifting back toward a surplus. And as of the start of November, it’s sitting just under the threshold that signals a return to growth. In other words, the wind appears to be shifting for RS Group. And yet, so far, the market doesn’t appear to have noticed, creating a potential buying opportunity.
Of course, there’s no guarantee on the exact timing of when the electronics industry will make a full recovery, creating growth tailwinds for this business. And investors can’t ignore the threat of rival firms seeking to also capitalise on this hotly anticipated industry bounce back.
Nevertheless, given the firm’s track record, RS Group’s a business worthy of closer inspection, in my opinion. I’m researching it and think it’s worth considering.
The post The FTSE 100’s trading near a 52-week high! I’m still looking to buy appeared first on The Motley Fool UK.
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The cost of living crisis shows no signs of slowing… the conflict in the Middle East and Ukraine shows no sign of resolution, while the global economy could be teetering on the brink of recession.
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Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays Plc and Rs Group Plc. 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.
