1 of my top FTSE 100 stocks just fell back into value territory. I’m buying
Value investors looking for stocks to buy in March should check out Informa (LSE:INF). The share price is down 10% Monday morning (2 March), but Iâm sensing an opportunity.
The stock looked reasonably attractive to me even more todayâs move. But a big drop means itâs jumped the queue to the top of my ‘to-buy’ list for this month.
Iran disruption
Military strikes in Iran from the US and Israel have jolted the stock market this morning and share prices are going in different directions. And Informa is one of the casualties.
One of the biggest reasons for this is oil, with Iran one of the largest global producers. But Informa isnât a major consumer and thatâs not why the stock’s falling.
The FTSE 100 firm is in the trade show business. And while it doesnât have operations in Iran, it has been focusing on growth in the Middle East â specifically in Dubai and Riyadh.
Political unrest in the region can therefore be a major source of disruption. As a result, the stock’s falling due to the heightened instability.Â
Joint venture
As of this year, Informa has a huge joint venture with the Dubai World Trade Centre. This combines some of each companyâs strongest assets into a powerhouse of a business.
The plan is to launch this onto the stock market in the second half of the year. But political instability in the Middle East could make that very bad timing.
To say this is important for the FTSE 100 company is an understatement (the CEO even relocated to Dubai last year to oversee the operation).Â
In response however, Informa has announced plans to advance its £200m share buyback. And with the stock falling, I think it could be a good time to consider a similar move.
Quality
From an investment perspective, I think Informa’s one of the FTSE 100’s most attractive companies. Its trade shows are industry-leading events that are a crucial part of the calendar for a number of businesses.
The economics of these are also very attractive for the firm. They donât have the maintenance costs associated with owning venues, making them highly cash-generative.
A 10% decline in a day means Informaâs market value is now below £10bn. And I think thatâs fundamentally cheap for a business that made £700m in free cash last year.
Investors should expect ups and downs. But the company has a lot of unique strengths that are likely to prove hard to disrupt over the long term and that makes it attractive for investors.
Opportunity
Thereâs a lot to think about in the Middle East at the moment, for reasons that go far beyond investing. But the stock market â naturally â has its eyes on the implications for businesses.
Iâve been looking for an opportunity to add to my investment in Informa for some time. And I think the share price falling in response to the latest disruption might be it.
Instability could affect the firmâs immediate plans. But the stock looks extremely good value to me, so itâs just jumped to the top of my ‘to-buy’ list for this month.
The post 1 of my top FTSE 100 stocks just fell back into value territory. I’m buying appeared first on The Motley Fool UK.
Should you invest £1,000 in Informa plc right now?
When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Informa plc made the list?
More reading
Stephen Wright has positions in Informa Plc. The Motley Fool UK has recommended Informa 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.
