With P/E ratios of 7.2 and 9, I think these FTSE 100 shares are bargains!

These FTSE 100 shares are on sale. Right here’s why I believe they’re value severe consideration from savvy buyers.

Rio Tinto

2024’s been a troublesome 12 months for mining corporations. Regardless of supply-side worries, costs of key commodities have sunk attributable to continued financial weak point in China.

Issues have been particularly troublesome for main iron ore producers, too. Diversified miner Rio Tinto (LSE:RIO), for example, recorded disappointing ore cargo forecasts once more within the third quarter. At 84.5m tonnes, these missed estimates by round 800,000 tonnes.

This weak point displays troubles in China’s property market particularly. It implies that Rio’s share worth has dropped 15% for the reason that begin of 2024.

As a consequence of this weak point, the mega miner at the moment trades on a ahead price-to-earnings (P/E) ratio of simply 9 occasions. I believe this represents a horny dip shopping for alternative to think about.

I imagine the long-term outlook for Rio stays extraordinarily brilliant. It’s why I personal its shares in my very own portfolio.

For one, demand for industrial metals like iron ore, copper, and aluminium is tipped to growth within the coming a long time. That is due to a plethora of things together with the rising inexperienced financial system, ongoing urbanisation in rising markets, and fast world digitalisation.

I additionally like bigger operators like this, as their appreciable monetary energy provides them further development alternatives. Rio itself put up $6.7bn final month to purchase Arcadium Lithium, whose product is a vital materials in electrical automobile manufacturing.

I don’t assume these phenomena are mirrored within the cheapness of Rio Tinto’s shares.

One ultimate factor to think about: the Footsie agency’s P/E ratio of 9 occasions is considerably decrease than the corresponding readings of different diversified mining giants.

HSBC Holdings

HSBC‘s (LSE:HSBA) additionally beneath menace from China’s financial slowdown. However this isn’t all. The financial institution additionally faces mounting stress on revenue margins as world rates of interest begin to head decrease.

But regardless of issues in Asia’s largest financial system, the financial institution’s share worth has headed in the wrong way to Rio Tinto’s. It’s at the moment up 14% within the 12 months so far.

Whereas it’s not out of the woods, buying and selling at HSBC has encouragingly overwhelmed most expectations thus far, driving investor curiosity. Income and pre-tax revenue have been up 5% and 10% respectively in quarter three, newest financials confirmed.

Regardless of latest worth good points, HSBC’s shares nonetheless look dirt-cheap to me. Their ahead P/E ratio of seven.2 occasions is nearly half the FTSE 100 common (14.1 occasions).

The rising markets financial institution can also be less expensive than most of its blue-chip friends primarily based on predicted earnings.

I’d far sooner buy HSBC shares than UK-focused shares like Lloyds and NatWest. And that’s not simply due to its superior worth.

Its deal with fast-growing Asia offers the chance for breakneck earnings development due to rising regional wealth and inhabitants growth. Like Rio Tinto, I believe it’s a prime cut price to think about.