The performance of the FTSE 100 has disappointed in recent months, which is why I’m focusing on the investment prospects of Tesco PLC (LON:TSCO) (TSCO.L), Glencore PLC (LON:GLEN) (GLEN.L), Aviva plc (LON:AV) (AV.L) and easyJet plc (LON:EZJ) (EZJ.L). Could they offer good value for money at the moment?
Tesco’s share price trades on a PEG ratio of around 0.8 at the moment. I feel that this may include a margin of safety which may be necessary should Brexit contribute to a weakening of consumer confidence. Shoppers are already relatively price conscious in my opinion, and could become more so if fears surrounding Brexit build in future months.
With Tesco having what I consider to be a sound strategy that is focused on efficiency and customer service, I believe it could generate improving financial performance in the long run.
Glencore’s shares have come under pressure in recent months partly as a result of uncertainty surrounding the prospects for the world economy in my view. A rising US interest rate may also have caused investors to adopt a cautious stance towards the company.
With Glencore’s shares now having a single-digit P/E ratio and the company having strengthened its balance sheet and reduced costs in recent years, I feel it is in an improved position to deliver capital growth in future years.
Aviva’s P/E ratio of around 8 suggests to me that the stock could offer good value for money at the moment. Its exposure to fast-growing markets across the world could provide a catalyst for its EPS performance in the long run.
With Aviva generating excess capital, it could deliver an improved business model through acquisitions and reducing leverage. A dividend yield of over 6% suggests to me that the stock may also have income investing appeal.
easyJet’s financial prospects may have improved following the fall in the oil price since October. However, the company still faces an uncertain future in my view, with consumer confidence being weak in the UK and Brexit causing potential logistical challenges.
With a PEG ratio of around 0.7, I feel that easyJet could offer a margin of safety. It also appears to have a sound balance sheet as well as an improving strategy that has been successful at increasing passenger numbers.