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The FTSE 100‘s blistering bull run is showing no signs of slowing: at 10,419 points on Wednesday (4 February), the UK’s benchmark of blue-chip shares just hit new highs. It’s now up a whopping 22% over the last 12 months.
Yet while the index keeps on soaring, there are still many top stocks that continue to trade at rock-bottom prices. Accounting software provider Sage (LSE:SGE) is one that’s caught my eye this morning. So is housebuilder Barratt Redrow (LSE:BTRW).
So what makes them great bargains to consider? Let’s take a look.
Barratt Redrow
Barratt shares have risen a healthy 6% in the year to date. But in my view, shares of Britain’s biggest housebuilder continue to trade at an attractive discount.
A forward price-to-earnings (P/E) ratio of 14.8 times isn’t much to shout about. However, the price-to-earnings growth (PEG) ratio tells another story. Profits are tipped to rebound this year, resulting in a modest reading of 0.1.
Any sub-1 reading suggests a company trading in bargain basement territory. What’s more, Barratt’s PEG is just 0.5 and 0.4 for 2027 and 2028.
I’m not surprised that City analyst expect profits to shoot higher from this year. A blend of Bank of England interest rate cuts and fierce mortgage market competition is souping up demand for new homes by bolstering buyer affordability.
Housing experts believe this could underpin a strong and sustained market recovery. Analysts at Capital Economics predict average home price growth will hit 3.5% in 2026 and improve to 4.5% next year.
There are threats to these forecasts, like a sudden downturn in the UK economy or slower-than-expected interest rate cuts. But on balance I’m optimistic Barratt can bounce back sharply, and that this isn’t reflected in its cheap share price.
Sage
Sage, meanwhile, is experiencing a share price meltdown right now as worries over software stocks grow. In a nutshell, tech shares are plummeting the world over after Anthropic released its updated and highly sophisticated Claude system, reviving concerns over how AI will damage software and IT services revenues.
It seems clear AI will cause some disruption, though the eventual scale is tough to predict at this time. What I do know is that many top tech shares are so cheap they merit serious consideration. FTSE 100-listed Sage is one such company.
Its shares have plummeted 15% over the last two days. So it trades on a forward P/E ratio of 19.3 times, which is miles below the 10-year average of 31-32. Furthermore, its PEG ratio is also now below the bargain watermark of 1, at 0.9.
What makes Sage worth a close look? In my view, it could be a beneficiary of the AI revolution given its own heavy investments in the area. The business launched its Sage Copilot tool last year, which is being steadily rolled out and integrated across its software platform.
Encouragingly, its new model has proved popular with customers, and helped organic revenue growth accelerate to 10% in the December quarter. Sage CEO Steve Hare believes AI will “change the nature” of accounting.
Do the shares come with risk? Absolutely. But at current prices, I think they deserve serious consideration.
