Investors should buy these FTSE stalwarts in March!

At FTSE still gives great value, despite this year’s general meeting. In fact, if I were an American investor, I would look to these indexes with the goal of finding value and growing my portfolio for the long term. UK stocks have some of the best value in the world today.

Today, I’m looking at two UK stocks that investors should buy in March. So let’s take a closer look.

Smith & Nephew

Smith & Nephew (LSE:SN) reported full-year revenue of $5.22bn on Tuesday. This was up 4.7% on a year-over-year basis, with growth linked to positive performance across all franchises and geographies.

Trading profit for the year came in at $901m, down from $936m. The company reported a trading profit margin of 17.3%, down from 18% in 2021. The decline was attributed to inflationary pressures.

Reported growth was only 0.1%, due to the negative impact of foreign exchange headwinds

Looking forward, Smith & Nephew reports progress in its 12-point plan, which aims to drive growth in advanced wound management, sports medicine and orthopedics.

This, in turn, contributes to a revenue growth of 5-6% for 2023, and a trading profit margin of at least 17.5%. Regarding long-term goals, Smith & Nephew said it is targeting at least 5% underlying revenue growth and at least 20% trading profit expansion by 2025.

I understand the ongoing and challenging impact of inflation, as well as the underfunded nature of health care.

However, I think there are some big tailwinds here. First, there is a huge backlog of elective procedures, and we have the challenge of an aging population in most Western countries. This should translate into more business for hip-replacement specialists.

The stock trades at a forward price (P/E) of 15 – slightly above the index average but a very good ratio for healthcare.

Barclays

Barclays (LSE:BARC) disappointed investors last week, after the FTSE stalwart posted pre-tax profits of £7bn for 2022, missing estimates of £7.2bn. In fact, after the announcement, the stock price dropped more than 10%.

I think this is an overreaction – although I appreciate that the £500m share buyback makes City uncomfortable. So I bought more shares, with a P/E of only 5.5.

There are some other positives in the report. Barclays targets a 2023 net interest margin of more than 3.2%, up from 2.86% at the end of 2022.

We can also assume that the interest rate tailwind will continue for several years. Inflation is proving to be stickier than anticipated, so interest rates may stay higher for longer. In the US, we can also see that economic activity is less vulnerable to rate hikes than we think – this may also prove to be the case in the UK.

Furthermore, Barclays uses a hedging strategy, providing for the smoothing impact of rate hikes and extending net interest gains over time.

Finally, I appreciate there are challenges, especially around bad debt. Last year, the bank’s performance was dragged down by a £1.22bn impairment charge. However, I believe Barclays can continue to perform in this environment.