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One very popular method among investors, including the great Warren Buffett, is to look for and buy value stocks. These are companies that are, for a variety of reasons, trading on low valuations relative to their fundamentals.
Looking around, I can see a few of potential opportunities to consider in the UK market.
Turnaround candidate?
Broadcaster ITV (LSE: ITV) is arguably one example. Based on analyst projections, its shares currently change hands at a price-to-earnings (P/E) ratio of just under 10.
The trouble is that the performance of the share price over the long term leaves a lot to be desired. Anyone picking up the stock five years ago will have endured a 33% fall. Sure, dividends received over this period would have soothed the paper loss to some extent. But this is akin to treading water. It’s not a recipe for getting rich.
Can long-standing CEO Carolyn Mccall and her team turn things around? The sheer amount of competition ITV faces along with the structural decline in TV advertising suggests it will be tough. But more growth in its Studios division would certainly do no harm. I also wouldn’t rule out a takeover bid or two.
In the meantime, the stock offers a forecast yield of 6.3%.
Huge dividend yield
Price comparison websites provider MONY Group (LSE: MONY) is a second mid-cap value stock that catches the eye and may be worth further research. Like the broadcaster, its share price has been going down for some time now. We’re talking about a 14% fall in the last 12 months.
A lot of this seems to be fuelled by concerns over the £900m cap’s ability to grow. Yes, revenue is ticking up but this is not the sort of momentum that’s going to get investors busting a gut to buy. The large number of share sales by directors in March doesn’t bode well either.
All that said, MONY trades on a P/E of nine. That looks remarkably cheap considering the above-average margins it consistently posts. The launch of a new MoneySuperMarket Chat GPT app also shows how it’s leveraging artificial intelligence (AI) to enhance services for customers.
The passive income is worth mentioning too. At a chunky 7.6%, the forecast yield is over double that of the FTSE 250.
How cheap?
By contrast to the previous two stocks, JD Sports Fashion (LSE: JD) pays relatively little in dividends. So there won’t be much in the way of compensation for buyers if the shares keep falling in value. They’re already down nearly 20% in 2026 alone!
The outlook isn’t great either. With inflation on the rise due to the conflict between Iran and the US, it’s likely that shoppers will be looking to cut back (again) on discretionary purchases.
But I still think there’s a lot to like. JD’s ongoing growth strategy in the US is progressing well and now accounts for a significant amount of total revenue. The forthcoming footfball World Cup could also provide a boost to earnings (even during tough times) thanks to long-standing partnerships with key brands such as Nike and Adidas.
To cap things off, it’s also the cheapest of the three. The P/E here’s a little less than six! If/when sentiment improves, those brave enough to think about investing now could be rewarded.
The post P/E ratios of less than 10. Are these 3 FTSE value shares hot enough to consider buying now? appeared first on The Motley Fool UK.
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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended ITV, Mony Group Plc, and Nike. 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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