July 5

Looking for a FTSE 100 bargain? I’d buy Lloyds shares right now

first_img Image source: Getty Images. Enter Your Email Address See all posts by Rupert Hargreaves Lloyds (LSE: LLOY) shares have been one of the worst-performing investments to own in the FTSE 100 this year. Indeed, in 2020 alone, the stock is down around 50%, excluding dividends. This decline might put some investors off the UK’s largest mortgage lender.However, the outlook for Lloyds shares over the long term is positive. As such, buying the stock after its recent decline could lead to attractive income and capital gains over the long run.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Lloyds shares on offer?Government-imposed lockdowns designed to control the spread of the coronavirus have caused an economic crisis across Europe. Investor sentiment towards financial stocks such as Lloyds has been impacted as a result.The reasons why investors have decided to dump their investments in these organisations are clear. Lenders such as Lloyds face the risk of rising loan losses and lower demand for borrowing in the short term as companies and customers try and adjust to the new normal.This suggests Lloyds shares could see further pain in the short term. Nevertheless, the lender is much stronger financially than it was in the last economic downturn. It’s unlikely Lloyds will need another state bailout this time around. Therefore, the company seems well-positioned to weather the storm and emerge on the other side in one piece.An economic recoveryWhen the crisis is over, Lloyds could benefit from an economic recovery. The UK economy has suffered many periods of disruption in the past. On some occasions, it has taken many years for the economy to regain lost output, but every single time, it has come back stronger. It is highly likely we will see the same pattern this time around, which may be good news for Lloyds shares. For example, as mentioned, Lloyds needed a bailout in the financial crisis. But over the past decade, it has become stronger and more profitable than ever before. The UK government has sold its stake and before the coronavirus crisis, Lloyds shares were one of the most attractive income plays in the FTSE 100.A margin of safety Of course, there’s no guarantee the same pattern will emerge this time around. However, with Lloyds shares down nearly 50% since the beginning of the year, the stock appears to offer a wide margin of safety.Buying a stock with such a wide margin of safety gives investors a level of protection against further adverse developments. It helps improve the chances of a positive return over the long run because even if there is only a slight improvement in its fortunes, the potential for profits could be substantial.As such, now could be a great time to take advantage of the market’s short-term way of thinking and buy Lloyds shares at a deep discount. The stock could potentially offer substantial capital gains as a steady income stream from current levels. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Lloyds Banking Group. 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. Looking for a FTSE 100 bargain? I’d buy Lloyds shares right nowcenter_img Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Simply click below to discover how you can take advantage of this. Our 6 ‘Best Buys Now’ Shares I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Rupert Hargreaves | Saturday, 13th June, 2020 | More on: LLOY last_img read more