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The FTSE 100 index has had a number of massive winners in 2025. Barclays (+68%), Worldwide Consolidated Airways or ‘IAG’ (+33%), and Video games Workshop (+48%) are some examples.
There’s an inexpensive Footsie inventory that has outperformed all of those names, nonetheless. And surprisingly, nobody’s actually speaking about it in the identical means because the aforementioned trio, which means that it may have additional to run.
From zero to hero
The inventory I wish to spotlight at this time is Prudential (LSE: PRU). It’s a longstanding British insurance coverage firm that’s centered on the Asian and African markets at this time.
This inventory had a dreadful time between the beginning of 2023 and the tip of 2024 on account of Covid/financial woes in China. Nonetheless, this 12 months, it has made an enormous comeback, rising about 72%.
Nonetheless low-cost at this time
Extremely, it nonetheless appears low-cost, even after that massive share value pop. With analysts forecasting earnings per share of $1.18 subsequent 12 months, the price-to-earnings (P/E) ratio is barely about 12.
That a number of is beneath the UK market common. So, there seems to be worth on supply right here nonetheless.
One different factor to notice is that the inventory stays effectively beneath its highs. Again in 2018, it was buying and selling above £16 in comparison with Friday’s (12 December) £10.72 shut.
Three causes to take a better look
Is the inventory value contemplating for 2026 and past given its share value momentum and low valuation? I believe so (I’ve been shopping for extra shares myself lately).
For starters, current outcomes have been spectacular. In late October, for instance, the corporate stated that in Q3 it noticed a 13% year-on-year enhance in new enterprise revenue.
Importantly, the corporate noticed double-digit development in each Mainland China and Hong Kong in Q3. So, these markets seem like again on observe after some Covid woes.
Second, the corporate is promoting off its stake in ICICI Prudential Asset Administration, which is about to go public. That is set to have a valuation of round $12bn so this could herald a good bit of money for the corporate, which may imply extra share buybacks or greater dividends (the yield is barely 2% at the moment).
Third, analysts have been growing their value targets lately (this exercise tends to spice up a inventory). Word that the common value goal is about £13 – round 20% above the present share value.
In fact, financial situations in Asian and African markets are a danger with this inventory. These are rising markets and they are often extra risky than developed markets such because the UK and the US.
Turbulence within the international monetary markets is one other danger to think about. This might negatively influence property on Prudential’s steadiness sheet (eg shares and bonds).
General, I like the chance/reward proposition at present ranges. In my opinion, the inventory is worthy of additional analysis.
As are a couple of different high-quality shares within the Footsie that look low-cost at this time.
