After the Easter weekend, investors begin to look towards a traditionally weaker period for the stock market. May, June and September are traditionally the months with the lowest returns for FTSE 100 shares historically. Nonetheless, I’ll continue searching for cheap stocks to buy before the summer, despite concerns about seasonality.

Let’s explore the FTSE 100 stocks I’d buy in my Stocks and Shares ISA next month.

Aviva

The Aviva (LSE: AV) share price trails the FTSE 100 index over five years. It’s down 15% compared to the Footsie’s 7% gain. However, with a price-to-earnings (P/E) ratio of 8.74 and a dividend yield over 5%, I find Aviva stock attractive from both a value investing and passive income perspective.

The life insurance and pensions provider is returning total capital of £4.75bn to shareholders in addition to the £1bn share buyback it completed last month. This should provide downside protection to Aviva’s share price.

As inflation surges, Aviva shares could face some headwinds. For instance, the macroeconomic environment may result in lower consumer demand for retail annuity deals.

Conversely, with over £400bn assets under management, the company’s well placed to take advantage of a hawkish monetary policy response. Rising central bank interest rates afford Aviva the opportunity to move funds into higher interest-generating investments.

For me, Aviva looks like a reasonably valued FTSE 100 share with solid finances. I’d buy.

GlaxoSmithKline

At nearly $117.5bn, GlaxoSmithKline (LSE: GSK) is a top five FTSE 100 share by market capitalisation. Last year was tumultuous for this pharmaceutical giant. Activist investor Elliott Management unsuccessfully tried to remove the company’s CEO Emma Walmsley due to concerns over her non-scientific background.

Tensions eased last week following GSK’s takeover of US cancer drug developer Sierra Oncology in a $1.9bn deal. Moreover, 2021 saw GSK grow its revenues for the seventh year in a row — up by 5%. The healthcare business forecasts a 12%-14% rise in operating profits this year.

The GSK share price reflects the company’s strong recent performance, soaring 31% over the past year. Shareholders also currently pocket a healthy 4.52% dividend yield.

GSK carries a P/E ratio of 20.33, which is considerably lower than some direct competitors, such as AstraZeneca. As a defensive investment, with lower susceptibility to seasonal and cyclical fluctuations, GSK is my FTSE 100 pharma pick for May.

Whitbread

Whitbread (LSE: WTB) manages a range of hotels, restaurants and leisure clubs in the UK and Germany. The hospitality firm’s share price is down 18% over the past year following substantial revenue declines during the pandemic.

However, brighter days lie ahead, in my view. There are no longer any testing or quarantine requirements for international arrivals to the UK. Additionally, the rising cost of living means staycations are an attractive option for British holidaymakers this summer.

The combined effect of these developments should benefit Whitbread, which owns the Premier Inn brand. Indeed, like-for-like accommodation sales in the UK were up 5.5% over pre-pandemic levels in the third quarter of Whitbread’s 2022 financial year, although a 33.3% decline in Germany brought the total gain down to 5.1%.

Should a return to pre-Covid normality continue in both countries, Whitbread’s budget hotels should do well. I’d buy this FTSE 100 share before a summer recovery.

The post Sell in May and go away? I’d buy 3 FTSE 100 shares instead appeared first on The Twelfth Magpie.

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Charlie Carman does not own a position in any of the companies mentioned. The Motley Fool UK has recommended GlaxoSmithKline. 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.

Despite not being exposed to the tech titans, his investment vehicle — Pershing Square Holdings — has outperformed the S&P 500 over the last five years. And when you consider the US index has more than doubled itself over this time, I think this makes Ackman worth listening to. 

Thinking like Bill Ackman

As a value investor, Ackman looks for stocks he believes are being unfairly rated by the market. This isn’t to say he automatically buys anything with a cheap-looking price tag. He actually makes a point of only investing in companies with sound balance sheets and strong brands in sectors with significant barriers to entry.

The drawback of adopting this approach is that it takes time for value plays to work out (if they work out at all!). This can test even the most patient of investors. It’s hard to stay committed to a stock when others are making great money in glitzy tech shares or promising penny stocks. 

Not that this bothers Ackman. As he said: “Investing is a business where you can look very silly for a long period of time before you are proven right.” In other words, he’s more than happy to play the contrarian. 

I believe there are at least a couple of stocks in the FTSE 100 that matches this mentality.

2 UK stocks Ackman might like

1) Tesco (LSE: TSCO) is a stock Ackman actually once contemplated buying. It’s not hard to see why. A great brand is just one of the FTSE 100 member’s attractions. And right now, the UK supermarket giant also looks good value at 13 times forecast earnings.

The shares have been stuck in the 200-250p range for a couple of years. However, I reckon Tesco’s share price will rise again as additional costs relating to Covid-19 aren’t repeated and profits rise accordingly. Yes, the supermarket sector remains a highly competitive space. The growth of German discounters, for example, shows no sign of slowing. However, if any company can beat back rivals, it’s one with a huge market share.

In the meantime, Tesco yields 4.1%, according to analyst projections. I’d have no problem buying the stock for my ISA today.

2) Whitbread (LSE: WTB) is another FTSE 100 stock I think Ackman might like. He does, after all, hold a considerable position in Hilton within the Pershing Square portfolio.

Whitbread has an excellent brand in Premier Inn. It also has a commanding market share of the budget hotel sector in the UK. Having taken advantage of the weakness of opportunities over the pandemic, it now stands to fully benefit from a rebound in travel and tourism in the UK. On top of this, the firm is continuing to expand in Germany. This should give it more geographical spread, earnings-wise.

Quite when we see a full recovery in the Whitbread share price is open to debate. Variants of Covid-19 could still impact the hospitality sector for some time to come, which comes back to the point of being patient. 

The post I’d listen to billionaire Bill Ackman and buy these FTSE 100 shares for my ISA appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Tesco. 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.

Trading “significantly ahead”

Unsurprisingly, total accommodation sales in the UK remained far below what would normally be expected over a single quarter (-60.9%). Naturally, food and beverage sales weren’t great either, down 86% compared to what Whitbread was making in FY20 (the year before the pandemic). All told, total sales — including the contribution from Whitbread’s operations in Germany — fell 69.8%.

As scary as these figures initially seem, one does need to keep things in perspective. After all, the UK was still in lockdown for much of this time. Moreover, positive momentum at this FTSE 100 giant appears to be gathering pace.

In addition to stating that it had traded “significantly ahead of the market” in Q1, Whitbread commented today that it had seen “encouraging trends” since 17 May (Step 3 of Boris Johnson’s lockdown roadmap), by which time 98% of its hotels were open. In Germany, 19 of the company’s 30 hotels are now open.  

What next?

Despite Boris Johnson’s decision to delay fully reopening England, Whitbread said today that it would not be making any changes to its full-year guidance. The hotelier also said that it expected “very strong” leisure demand in tourist destinations over the summer. This largely positive outlook should be reassuring for holders, even if a recovery in business demand may not happen until the the autumn. It also goes some way to explaining the near-4% rise in the share price this morning. 

As a longer-term investor, however, I’m more interested in Whitbread’s growth strategy. We’ve known for some time that the FTSE 100 member wanted to take advantage of rivals’ relative instability during this tricky period. It comes as no surprise, therefore, that 10 new hotels were opened over Q1. This attempt to “optimise” its estate and snap up sites should stand it in good stead when normality returns. 

The company’s plans for its German market are also compelling. Having added three new hotels over the last quarter, the FTSE member now has a pipeline of 73 sites in the country.

On top of this, Whitbread’s finances seem in good order. Net debt stood at £70.6m at the end of Q1, thanks in part to an accumulation of customer deposits. This has allowed the company to continue marketing investment to generate more visits to its website. 

My verdict

Whitbread’s share price is still some way below where it stood pre-pandemic. While wary of becoming fixated on this target, it does suggest there’s quite a bit of upside remaining. 

But there are downsides and ongoing risks too. Dividends, for example, are still to be restored. So, I’d steer clear of the stock for now if I were looking to generate income. Moreover, I can’t overlook the possibility that there could be more coronavirus-related crises in the months ahead. Despite its market-leading position, the £7bn cap will never be free of competition either.

Even so, I do believe this is the beginning of the end rather than the end of the beginning to Whitbread’s woes. As such, I’d still be happy to buy this FTSE 100 stock today. 

The post 1 FTSE 100 recovery stock to buy today appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

Whitbread (LSE:WTB) might seem like the perfect FTSE 100 stock for me to pick up as the UK’s economy continues to reopen. The company owns Premier Inn and a range of branded restaurants and bars. This should allow Whitbread to benefit from people taking UK holidays and going out to eat and drink.

Or should it? A lot of investors had this idea back in February as the UK emerged from winter and bought into ‘reopening’ stocks. One of these was Whitbread and this resulted in its share price flying to around the 3,500 mark.

Since that time, shares in the FTSE 100 company have fallen to 3,046. Full-year 2021 financials released at the end of last month showed a loss of £1bn for the year and a 71.5% drop in revenue. A tough year but not unexpected because of the pandemic.

The big reopening

The problem for Whitbread is that it won’t benefit drastically from the reopening compared with other FTSE 100 companies. Premier Inn is a major driver of revenue for the company, with locations across the UK, Germany, and the Middle East. However, customers are split evenly between business and leisure. With business travel not recovering to pre-pandemic levels, there won’t be an immediate uplift in numbers here. The company stated that it doesn’t expect this to change until offices reopen in earnest.

For leisure, only 15% of Whitbread’s hotel estate is in coastal and other tourist locations. As a result, its revenues won’t receive a major boost from the ‘staycation’ boom expected in the UK.

On top of this, the food and drink segment of the business is closely aligned with its hotel business. The restaurants are generally located within or next to a Premier Inn. This means that the boom in food and drinks sales expected this summer may not arrive for Whitbread without higher numbers of hotel stays.

FTSE 100 long-term play?

For these reasons, I don’t see Whitbread as a short- or medium-term investment to benefit from the UK economy reopening. On the other hand, I could see it as a potential option for a long-term investment.

The FTSE 100 company does benefit from being well placed as the largest hotel operator in the UK. It is aiming to expand internationally, focusing on Germany where it plans to more than double its footprint from 30 to 72 hotels. Its balance sheet is also particularly strong, with only £46.5m in net debt and cash reserves of £1.25bn.

Whitbread’s share price also hasn’t fully recovered from where it was pre-pandemic at around 4,000p. This means that if the numbers of people staying at its hotels return to pre-pandemic levels and profitability improves, there could be a pop in the share price.

But I don’t see this playing out in 2021. As a result, I will be staying away from Whitbread for now. But I’ll potentially return for another look once the sector is on a stronger path to recovery.

The post One FTSE 100 reopening stock I’m avoiding appeared first on The Twelfth Magpie.

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Ben Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

But following its interim results released last October, the Whitbread share price has been recovering. And has since increased by 55%. Is this a sign that the worst is over? Will it return to its pre-pandemic levels? And should I be adding the stock to my portfolio? 

What’s going on with Whitbread’s rising share price?

Whitbread is an owner of both hotels and restaurants that generate 64% and 36% of revenue, respectively. It operates under multiple UK brands including, Premier Inn, Beefeater, Brewers Fayre, and several others. Unfortunately, these just happen to be some of the worst types of businesses to be heavily impacted by pandemic.

Its locations were forced to close multiple times throughout last year. So the company reported a 77% decline in revenue as well as a net loss of £153.7m. While this is obviously bad news, the interim report did reveal some promising trends that may explain why the Whitbread share price started to climb.

An independent report from PwC estimated that the UK hotel occupancy rate for 2021 will be around 55% and won’t return to pre-pandemic levels until 2023.

However, in the case of Premier Inn, while its average occupancy is around 50%, some of its seaside and tourist area hotels are seeing levels closer to 80%. What’s more, its newly established operations within Germany have experienced 32% growth in sales, even with all the lockdown restrictions in place.

Combining this performance with Whitbread’s successful rights issue that raised £1bn last year makes me believe the worst may have passed. 

Risks to consider

Both Whitbread’s hotel and restaurant businesses appear to be recovering based on quarterly performance. However overall, sales for both segments are still down by around 70% over the last nine months. The firm did raise a substantial amount of capital to see it through the remainder of the pandemic. But this may not be enough if the easing of lockdown restrictions is delayed, or if new health emergencies crop up in the future.

Another risk to consider is unrelated to the pandemic. The budget hotel industry is incredibly competitive, which limits Whitbread’s pricing power. 

The bottom line

Whitbread has a long road to recovery ahead, and I believe the share price has somewhat prematurely increased.  However, I find the strong performance from its German operations encouraging. These international hotels appear to be a new source of growth that could propel the share price even higher than its pre-pandemic levels over the long term.

Personally, I’m cautiously optimistic that Whitbread’s share price will recover in 2021. But I would rather wait to see how the firm performs over the next few months before buying any shares for my portfolio. Therefore, the stock is staying on my watch list for now.

The post Will the Whitbread share price recover in 2021? appeared first on The Twelfth Magpie.

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• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Zaven Boyrazian does not own shares in Whitbread. The Motley Fool UK has no position in any of the shares mentioned. 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.

Tumbling demand

Play on!

Of course, if I’m looking for a beneficiary rather than a victim of the multiple lockdowns, I can look no further than online musical instrument retailer Gear4music (LSE: G4M).

Back in November, I said that the company would continue to benefit from more people spending time at home and that has proved to be the case. 

At £52.2m, total sales were up 30% over the three months to the end of 2020. Overseas sales were a particular highlight, rocketing 51% higher than in 2019. UK sales rose 10% to £23m. What a contrast to Whitbread and other battered FTSE 100 stocks!

All told, gross profit rose 47% to £15.6m, leading the company to predict that earnings for FY21 would now be ahead of recently upgraded market expectations “and not less than £16.5m“. To put that in perspective, earnings for the last financial year came in at £7.8m.

Yes, this was a peak trading period and, yes, the shares are up over 500% since the dark days of March 2020. However, as CEO Andrew Wass suggested this morning, the lifting of restrictions should see other parts of the business — relating to rehearsing and performance — doing well. 

There could be some profit-taking ahead but I’d still back Gear4music to perform for investors over the medium-to-long term.

The post FTSE 100 stock Whitbread still looks a great recovery play to me! appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

Back in business

The fact that ITV plummeted in value earlier in the year (and is now in the FTSE 250) wasn’t hard to fathom. Reduced advertising revenue coupled with no filming at its Studios arm motivated investors to run for the exits. Clearly, the recent good news surrounding potential coronavirus vaccines has improved sentiment towards most stocks in general. That includes ITV. 

But it’s more than that. In its most recent update, CEO Carolyn McCall said the broadcaster had seen “encouraging signs” in both of its divisions. Advertising trends were recovering, with year-on-year Q4 numbers likely to be “slightly up“. Most (85%) of its productions had also resumed filming. Elsewhere, Britbox seems to be doing well enough. And the international rollout of the streaming service is “on track“.

Of course, there are still hurdles ahead. The second national lockdown will have undoubtedly hurt revenue and increased costs. And as things stand, there’s no guarantee that restrictions will be lifted on 2 December. With no dividends in sight, ITV is unlikely to be on many income investors’ wishlists.

Even so, I think a lot of this negativity is priced in. Assuming earnings really do recover strongly next year, shares in ITV still trade on a forward P/E of just 9. That could prove a bargain once the £4bn-cap completes its digital transformation. Those perennial takeover rumours could also gather pace if it’s successful in attracting “younger and harder to reach viewers” to its channels.

Growing market share

Like ITV, Whitbread’s shares sank in March. They were hit by travel restrictions that impacted hotel bookings. Also like ITV, it’s benefited from a return of optimism to global markets.

Whitbread has also been boosted by a bullish call from investment banks Goldman Sachs. It thinks the company is well-positioned for a post-pandemic recovery given its focus on the domestic travel market. It has upgraded the stock to a ‘buy’ from a ‘sell’. And the bank also suggested the FTSE 100 member has an opportunity to take market share from competitors.

I’m inclined to agree. Last month, CEO Alison Brittain said the company’s performance since reopening its hotels and restaurants after the first lockdown had been “encouraging“. Importantly, Whitbread was also continuing to trade “ahead of the market“, she said. Yes, it’s the biggest and best-known player in the UK, but that’s still a major achievement. 

Thanks to its £1bn cash call earlier in 2020, the business is likely to weather the ongoing coronavirus storm better than rivals. A stronger balance sheet will also allow it to grow its presence in Germany more quickly. In fact, it announced the capture of “up to 15 more hotels” in the country last month. This brings its total network to almost 70.

Similar to other FTSE 100 stocks, Whitbread’s shares generate no income at present. For capital gains-focused value investors, however, there’s surely more upside ahead. Despite recent positive momentum, the shares are still nearly 30% lower in value than where they were at the start of 2020! I’m keeping an eye on this one.

The post My call on these cheap FTSE 100 shares has been right so far. I think there’s more to come! appeared first on The Twelfth Magpie.

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Paul Summers owns shares of ITV. The Motley Fool UK has recommended ITV. 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.

Buying stocks that have been sold off in a stock market crash is risky, especially today. The economy faces a massive hit from Covid-19, and there could be more pain in the pipeline. However, history shows that buying shares at the moment of maximum uncertainty is a winning strategy.

Here are two risky stocks that could pay off. Buy them inside your Stocks and Shares ISA for tax-free returns, and look to hold for the long term.

Whitbread share price slump

The hospitality and leisure sector has been hit harder than most, with people locked down or banned from travelling, or nervously cutting back on their spending. Hotel and restaurant operator Whitbread (LSE: WTB) has inevitably had a tough time of it. Its share price fell by more than half in the stock market crash.

It has also failed to benefit from the recovery. While many FTSE 100 shares have posted healthy gains lately, the Whitbread share price still trades 4% lower than six months ago. 

At the height of the first wave, Whitbread axed its dividend and temporarily shut all Premier Inn hotels in the UK and Germany. Last month, it announced 6,000 job losses, almost one in five of its workforce.

Whitbread, which also owns Brewers Fayre and Beefeater restaurants, trades at just 11.4 earnings today. This has alerted analysts at Berenberg, who reckon the current share price undervalues its real estate by half, leaving the group undervalued.

This is the type of opportunity investors should be sniffing out after a market crash. The Whitbread share price could fly out of the traps if, say, we get a vaccine or infection rates diminish. It’s a tempting buy, but risky given current unknowns.

Stock market crash opportunity

Property development and investment company British Land Co (LSE: BLND) also saw its share price fall by more than half in the stock market crash, with little recovery since. That’s despite announcing it was resuming its dividend payments earlier this month, as footfall and retailer sales picked up strongly.

British Land says its balance sheet remains strong, with £1bn of undrawn facilities and cash, with no requirement to refinance until 2024. It has collected 74% of June rents, 98% for offices and 57% for retail.

The pandemic has hit commercial property and bricks and mortar retailers as hard as the leisure and hospitality sector. If the pandemic worsens and unemployment rises, rents could be at risk. British Land has been investing heavily in central London office space, which hangs in the balance with the rise of home working.

These challenges are reflected in its valuation of 10.5 times earnings. You get a forecast yield of 3.7%. Like Whitbread, the British Land share price is cheap after the stock market crash, but comes with risks that some may found unacceptable.

The post Stock market crash bargains! I’d buy these 2 dirt-cheap FTSE 100 stocks in an ISA appeared first on The Twelfth Magpie.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended British Land Co. 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.

Contrarian UK stock

Pre-pandemic, shares in Premier Inn owner Whitbread (LSE: WTB) struck me as being rather too expensive. While it remains the most popular hotel brand in the UK, I still think last year’s sale of Costa Coffee to Coca-Cola was a mistake. It did, after all, offer the company some earnings diversification in better times. 

Now that the share price has been hammered back to levels not seen for roughly seven years, however, the probability of making money from this top-tier UK stock has surely increased markedly.

My chief reason for thinking this is that Whitbread has acted fast to tap investors for new funds. A £1bn, deeply-discounted rights issue back in May provided the company with cash to cover outflows while its hotels remained shut.

More importantly, this money should also allow Whitbread the financial firepower to increase its market share by taking advantage of “enhanced structural opportunities” in both the UK and Germany. In other words, Whitbread is ‘buying the dip’. It’s intending to purchase assets on the cheap to reap the rewards later down the line.

Of course, the recovery for hoteliers is unlikely to be swift in the absence of a vaccine. Then again, I don’t think this should trouble Fools too much. The philosophy we endorse is the same as that of many brilliant investors such as Warren Buffett and the UK’s own Terry Smith: buy great shares at a reasonable price and sit back for value to be recognised. 

Whitbread certainly isn’t the best business I’ve ever come across. Then again, the value on offer suggests those investors looking for FTSE 100 bargains could do worse than run their slide rules over it.

Priced-in?

I fortuitously sold my holding in broadcaster ITV (LSE: ITV) just before March’s market crash. I’ve now begun rebuilding my position.

Like Whitbread, the £2.5bn cap has its problems — the ongoing reduction in advertising revenue being one example. Although some of this is temporary and coronavirus-related, many businesses are now opting to use sites such as Facebook to promote their products and services.

Another issue has been ITV’s ongoing struggle for viewers with US streaming services such as Netflix, Amazon Prime and Disney+. There’s no sign that this will get any easier going forward.

On a more optimistic note, ITV has form among UK stocks when it comes to bouncing back from cyclical setbacks. At the height of the last financial crisis, for example, shares fell as low as 25p each. Once the storm had passed, they climbed as high as 250p.

So long as the company’s Studios arm can get back to work, online revenue continues to grow and demand for its Britbox subscription service continues, I suspect (hope) history may repeat itself once the pandemic is truly over.

This is, of course, unless a deep-pocketed suitor decides to bid for the company beforehand. At only 64p per share, such an outcome wouldn’t surprise me. 

The post Looking for cheap UK stocks to buy after the market crash? I’d start here appeared first on The Twelfth Magpie.

More reading

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• Here’s how to invest £3,600 in UK shares to target a 7% dividend yield
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• With dividend yields averaging above 7%, are these 2 UK shares worth considering?

Paul Summers owns shares of ITV. The Motley Fool UK has recommended ITV. 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.

Two top names have just updated the markets as the economy edges out of lockdown. Both have a strong consumer focus, and should cash in when people get out and start spending again. An investor with £2k to invest could split it between them, free of tax through a Stocks and Shares ISA.

The JD Sports Fashion (LSE: JD) share price is flat today, as the sports, fashion and outdoor brands specialist reported weaker footfall after the lockdown. It also called for “rental realism” from landlords in the wake of the pandemic.

FTSE 100 fashion leader

Today’s financial results run for the year to 1 February. In other words, they belong to a different world altogether. Pre-tax profits rose 3% to £348.5m with revenues up 30% to £6.1bn. The next set of results will not be so good.

JD Sports Fashion has been one of the best performing stocks on the FTSE 100. If you had invested £2k exactly 10 years ago you would have almost £36,000 now. Today’s investors cannot expect a repeat showing from what is now a major blue-chip with a market cap of £6.54bn. However, it is finding growth opportunities by expanding in Europe, the US and Asia-Pacific.

Inevitably, management warned today that Covid-19 would have a “material impact” on this year’s results. It has refused to pay landlords during the lockdown and has demanded reductions and rent holidays.

Executive chairman Peter Cowgill remains optimistic, saying that its “core retail standards and commercial disciplines” will help it regain lost momentum, despite uncertainty over consumer behaviour and footfall.

The JD Sports Fashion share price is recovering from the crash, but still trades more than 20% down on its pre-crash peak. Falling incomes and unemployment will hit future sales and that’s a worry for a stock that still trades at 45 times forecast earnings. You might consider investing £1k of your £2k into this stock, but you can find much bigger bargains today.

Shares in Premier Inn owner Whitbread (LSE: WTB) fell almost 5% this morning after it reported a 79.4% drop in first-quarter UK and international sales, but what did investors expect? The vast majority of its UK and German hotels and restaurants were shut from the end of March.

Or invest your full £2k here

More than 270 UK hotels and 24 restaurants have now reopened. All 19 operational hotels are now open in Germany, including 13 that were refurbished and rebranded as Premier Inn during lockdown

Chief executive Allison Brittain reported “good demand for the summer months” in key tourist destinations, although London has underperformed. Last month’s £1bn rights issue will boost its balance sheet and allow it to withstand a long period of low revenues.

The Whitbread share price is still down more than 40% from its January peak and looks a bargain. I think the market is being harsh on a steady long-term FTSE 100 buy-and-hold.

The post £2k to invest in an ISA today? I’d check out these 2 FTSE 100 shares appeared first on The Twelfth Magpie.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.