3 Of The Best FTSE 100 Shares To Buy In October

Last Updated September 28th 2021
5 Min Read

The FTSE 100 has been gaining upside momentum for the past week. This has made a couple of stocks look quite attractive at current prices.

The mass vaccinations across the UK have led to the easing of restrictions, a factor that has improved the outlook for most companies. Everything from travel, housing, to commodities sectors have been giving positive indicators over the past few weeks.

When looking for high-potential UK stocks to buy, the industry outlook and individual company fundamentals are the best things to look for. These are parameters that, if right, can see a stock rally for weeks.

3 Of The Best FTSE 100 Shares To Buy In October

1. International Consolidated Airlines

Air Travel is opening-up

For example, International Consolidated Airlines (IAG) is expected to see an increase in flights all through October and beyond.

That’s because air travel is bouncing back after more than a year in limbo. One positive pointer to IAG’s prospects is the greenlighting of the Balaeric Islands as safe for travel. 

As more areas get the green light for travel, the airline business is set to bounce back.

Internal fundamentals are getting better too. One of the biggest fundamental aspects of stocks is insider buying and selling.

Insider selling is usually a bad sign, while buying indicates that those with the most information about a company’s standing are confident about its prospects.

Over the past year, International Consolidated Airlines insiders bought over GBP 100k worth of shares, and none of them sold.

The largest insider purchase was by Heather McSharrry who bought GBP 104,000 worth of shares. These shares were bought at slightly higher than the market price at the time.

International Consolidated Airlines insider ownership is in a healthy range too. Insiders around GBP 9.3 million of IAG shares, or about 0.1% of outstanding shares. This is an indicator that insider objectives are fully aligned with those of the company.

IAG’s books also paint the picture of a company that could rebound as the market environment improves.  

Despite the tough environment for the airline industry, IAG has a current ratio of 0.86. This is still within a healthy range, and as the business improves, it could improve as well.

Quarterly revenue growth year-on-year is on a positive trajectory too and stands at 77%.

While there is a risk of the return to normal getting hampered by the Delta variant of the Coronavirus, IAG is a reasonable-risk stock under prevailing circumstances.

2. Argo Blockchain

A crypto industry player

Cryptocurrencies are making a major comeback at the moment. Over the last couple of weeks, Bitcoin has come close to retesting the $50k level.

Most altcoins are up by double digits too, and Ethereum, the second-largest cryptocurrency by market capitalization was just $1000 shy of its all-time highs over the weekend. This makes crypto mining firm Argo Blockchain (ARB) a good buy at current prices.

ARB’s share prices tend to move in tandem with Bitcoin since it’s the company’s biggest asset.

Therefore, as the price of Bitcoin edges closer to $50k and bullish hype returns, ARB is well-positioned for gains in the short term.

The factors behind Bitcoin’s rising price are pretty strong too. They range from the institutional uptake of the crypto to countries like El Salvador, making it legal tender.

Ethereum is also playing a role in the rising bullish sentiment in crypto due to its protocol upgrade. It’s a factor that could see the overall market momentum stay up for weeks, and that’s good for ARB.

Argo Blockchain’s books look pretty good too. With a current ratio of 1.84, Argo has more than enough resources to cover its current liabilities. This is safe given that the Bank of England could raise interest rates at some point in 2022.

Its quarterly revenues are also growing at a healthy rate, standing at 179.40%. With income set to grow due to rising Bitcoin prices, Argo could see even higher quarterly revenue growth rates in the future.

These factors make ARB a pretty good stock to keep an eye on at current prices.

3. Burberry

A luxury goods brand

Another FTSE 100 stock that is quite attractive at current prices is Burberry (BRBY).

The luxury goods company saw its stock drop in the first week of September. This followed news that its CEO of 5-years was exiting the stage.

Since investors are still unsure of the direction the new CEO could take Burberry, the stock is still looking for direction.

However, the broader market fundamentals are pretty strong. The luxury goods market has performed quite well this year, and it is expected to get better.

That’s because, with the economy opening up again, a lot more people will be in a position to afford luxury products.

This places luxury goods dealers like Burberry in a good position for growth. Upside potential is already evident in BRBY’s performance year-to-date.

BRBY is up by 14% year-to-date, and with the market outlook getting better, it could gain even more.

Burberry’s company-specific fundamentals are rock solid too. Revenues are growing, and year-on-year quarterly revenue growth stands at 8.50%. 

With the economy opening up again, this percentage increase in quarterly revenue is likely to go up.

Burberry has a healthy profit margin on its revenues too. Profit margins stand at 16.03% while operating margins are at 17.69%.

Burberry is also well-capitalized. With a current ratio of 2.82, it has more than enough current assets to cover its current liabilities. Cash flows, too, are at a healthy GBP 591.4 million.

The best part is that Burberry is a dividend-paying stock. BRBY has a forward dividend rate of 0.42 and a forward annual dividend yield of 2.33%.

Besides these strong internal fundamentals, the luxury market tends to be one of the least affected by market downturns.

As such, even if the economy were to rebound slower than expected, this sector is likely to maintain an above-average growth rate.

This makes BRBY one of the best FTSE 100 stocks to buy in October in anticipation of more gains in short to medium term.

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