FTSE 100 shares look dirt-cheap and I’ve just bought these 3 unmissable bargains

Fireworks display in the shape of willow at Newcastle, Co. Down , Northern Ireland at Halloween.

It’s been a tough year for FTSE 100 shares but they look really cheap as a result and I have high hopes for the following three portfolio holdings.

I waited for years to buy shares in sports and leisurewear retailer JD Sports Fashion (LSE: JD) at a decent price. Finally, I spotted my chance after January’s profit warning.

The JD Sports share price has crashed 42.78% over 12 months and trades at just 7.8 times earnings. It looked an unmissable buy although I’ve taken an early hit as it’s down 9.65% since adding it to my portfolio on 22 January.

Too cheap to ignore

I jumped too soon. Experience has shown me that a profit warning is usually followed by a number of after-shocks, and I’ve been caught out by those.

JD Sports has a strong retail offering and I think it will recover once recession fears ebb and consumers feel a bit richer again. It has a healthy balance sheet, generates lots of cash and is building its supply chain, systems and stores. If I have more cash, I might average down on my position.

On 30 January, I finally bought shares in insurance conglomerate at Phoenix Group Holdings (LSE: PHNX). They were yielding almost 10% at the time, while trading at around seven times earnings. As the dividend looked sustainable, despite its dizzyingly high level, I decided it was a no-brainer buy.

As with JD, I’ve suffered some early pain. I won’t complain, though. I buy shares to make money over 10 years or more, not 10 days.

I’m willing to be patient with Phoenix. In fact, I’d like to buy more, with the stock trading at six times earnings and yielding a staggering 10.38%. At that rate, I’ll double my money in just over seven years, even if the share price doesn’t grow at all.

Phoenix will also benefit when interest rates start falling and investor sentiment picks up, as this will hopefully boost the value of the investments it holds to back its insurance liabilities.

Another comeback opportunity

These things are hard to predict, of course. For example, on February 1, Phoenix proudly announced it had hit its 2025 growth target two years early, with new business net fund flows up 80%. Instead of climbing, the share price fell. I still think it’s dirt cheap and I only wish I could buy more of the stock.

I bought paper and packaging specialist Smurfit Kappa Group (LSE: SKG) in June and at the end of November, and until last week I was in the red on my purchases. My luck has turned. The Smurfit share price jumped 10.97% last week, leaving me up 6.49% in total.

Smurfit has been hit by falling consumer demand while plans to expand in the US by acquiring rival WestRock drew a mixed response. Last week’s full-year results looked poor at first glance, with profit before tax down 18% to €1.05m amid falling demand for packaging.

However, investors chose to focus on Smurfit’s improved margins, a return to growth in Q4 and increased dividend. The stock still looks good value at 10.51 times earnings while yielding 4.1%, and I hope to see it continue its recovery. Again, I’d buy more, if I had the funds in my trading account. Sadly, I’ve spent it all.

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Harvey Jones has positions in JD Sports Fashion, Phoenix Group Plc, and Smurfit Kappa Group Plc. 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.