So, how big does a portfolio actually need to be? And what’s the smartest way to build it?

Crunching the numbers

The average full-time salary in the UK currently sits at £39,039, according to the latest ONS data. That means to sustainably generate that as a passive income, following the widely-used 4% rule, an investor would need a portfolio worth approximately £975,975.

That’s a chunky sum. But here’s the thing, you don’t have to get there overnight. And for patient investors who start early, it’s more achievable than most people think.

Can a modest investor really get there?

A modest investor putting aside £500 a month and targeting the market’s long-run 8% average total return would reach that figure in roughly 33 years.

That’s obviously a long time. Yet for those willing to pick stocks directly and focus on quality compounders, that timeline can shrink considerably.

One stock that expert analysts have flagged as a high-conviction opportunity in May 2026 is 3i Group (LSE:III).

Fun fact, over the last decade, the FTSE 100 private equity giant has delivered an exceptional 22.6% annualised return. And anyone who’s been drip-feeding £500 a month at this rate since 2016 is already sitting on £222,578. Give it another 10 years, and compounding would transform this into £2.3m!

These exceptional long-term returns are being driven by backing and growing businesses across Europe and North America. The most impressive has been Action, the discount retailer that has become one of the fastest-growing non-food retailers on the continent.

As 3i’s own management noted in its most recent results: 

“Action’s performance continues to exceed our expectations, with new store openings accelerating across Europe.”

That momentum has been a powerful engine for 3i’s net asset value and, by extension, its share price. But is the good news already priced in?

What could go wrong?

The bull case for 3i is hard to ignore. Action’s relentless store rollout shows no signs of slowing, with the business expanding into new territories and posting double-digit like-for-like net sales growth. For long-term investors, this is exactly the kind of quality compounder that can dramatically accelerate the journey towards financial freedom.

The bear case, however, is equally real.

3i’s fortunes are heavily tied to one investment. If Action were to stumble, whether from a shift in consumer spending, rising competition, or execution missteps in new markets, the knock-on effect for 3i’s valuation could be severe.

There’s also the broader macro backdrop to consider. A global economic slowdown or tightening credit conditions could weigh on private equity valuations more broadly, even if the underlying businesses remain healthy.

The key question now is whether Action can maintain its remarkable growth trajectory as it pushes into new markets.

The bottom line

No passive income journey is risk-free. But for patient investors with a long time horizon, the stock market remains the most powerful wealth-building tool available.

Overall, I think 3i is a compelling long-term compounder in the FTSE 100 right now. So, for investors dreaming of ditching the 9-to-5, it’s a stock that’s worthy of a closer look.

The post How much do you need to put in the stock market to quit work for a life of passive income? appeared first on The Twelfth Magpie.

As the world faces the biggest energy shock in its history, I’d have expected global share prices to have gone into meltdown weeks ago. But they haven’t. So why are the FTSE 100 and other indexes holding firm?

Share prices have certainly been volatile. But the UK’s blue-chip index is still up 3.75% so far this year, and 20% over 12 months. I think that’s pretty solid, given the scale of the threat.

So why haven’t share prices tumbled?

Just a few months ago, oil traded at around $60. Today, a barrel of Brent crude costs $107. In the past, dramatic shifts like that have triggered recessions and worse. Yet every time markets dip, they quickly recover. Investors have shown their resilience lately, shrugging off Covid, Ukraine, US tariffs and now war in Iran. They’re holding the line today even with the crucial Strait of Hormuz oil supply route still closed.

So far, we’ve avoided oil shortages in the West, by drawing down inventories and strategic reserves. But we can’t do this forever. If supply tightens, the market crash could still come, and I’ll be watching closely, waiting for a buying opportunity. But there’s one thing investors can do today.

And that’s to scour the FTSE 100 for top UK stocks that have taken a beating lately, and offer lower valuations and higher yields as a result. These five have been hit hard over the last three months.

I’ll be exploring all of these opportunities in the days ahead but right now I’m particularly intrigued by 3i Group (LSE: III) because I hold it. In fact, until recently, it was a portfolio star, having doubled my money in just over two years.

Can this FTSE 100 stock make a stellar recovery?

3i is a private equity specialist with a track record dating back to 1946. Lately, it’s been the vehicle for a single staggeringly successful holding, European non-food discount retailer Action. The chain now boasts more than 3,300 stores across Europe, attracting 2.6m customers every week.

Action’s sales grew another 16.1% to €16bn in 2025 but investors were starting to get nervous even before recent geopolitical uncertainty, fearing it would struggle to maintain its breakneck growth. Investors were in two minds over plans to move into the US, a famously tough market to crack.

But here’s why I’m highlighting it now. Before the sell-off, the investment trust was trading at a massive premium of 29% to underlying net asset value. Today, investors can buy it at a 15% discount. Also, the dividend yield has crept above 3%. 3i directors have been pouring their own money into the stock. I’ve taken advantage of recent dips too.

If markets do crash, 3i Group shares could fall even further, but I think they’re well worth considering today. Let’s see what summer brings. Will you be joining me in monitoring 3i’s progress?

The post Is a summer stock market crash now inevitable? appeared first on The Twelfth Magpie.

The FTSE 100 has been volatile but overall it’s climbed 4.15% so far in 2026. Over 12 months, it’s up an impressive 20.5%. With dividends reinvested, the total return nears 25%. Yet investors remain tense and understandably so.

The world faces the biggest oil shock in history, according to the International Energy Agency. If the Strait of Hormuz tanker route remains closed, Macquarie Group warns oil could hit $200 by the summer. It’s a Bank Holiday today (4 May), and the UK market is closed. What can we expect when it reopens tomorrow? It coudl go down, up or not do much at all. But the thing is, I’m not worried whatever it does.

What will I do in a meltdown?

Brent crude peaked at $124 a barrel last week. Today, it’s down to $109. Sentiment has been boosted by Donald Trump’s pledge that the US will guide ships through Hormuz. He also said talks with Iran have been “very positive” and could lead to broader de-escalation. If that holds, the FTSE 100 could jump tomorrow. But a fresh setback could trigger the long-feared crash. It’s hanging in the balance.

Second-guessing market movements is pointless though. Instead, I’m targeting buying opportunities as they emerge. And I can see plenty of compelling buys both in the event of a meltdown and today when one hasn’t actually happened. One of them is FTSE 100-listed private equity firm 3i Group (LSE: III).

The investment trust has a track record stretching back to 1946, when it was set up to help small and medium-sized British businesses secure long-term capital for reconstruction and expansion. Today, 3i takes controlling states in mid-market companies, managing them to generate sustainable growth and returns for shareholders.

One company has done so well it’s now worth 70% of 3i’s entire portfolio. Non-food discount retailer Action is growing rapidly in Europe, expanding steadily and managing thousands of stores. In 2025, net sales climbed another 16.1% to €16bn. Now 3i is gearing up to crack the US, which would take it to a different level.

Ready for a big recovery?

Despite Action’s stellar success, 3i shares have fallen 22% in the last three months, and 40% over the year. Personally, I think they rose too far, too fast. Action’s sales growth has to slow at some point. Many investors may also be wary of US expansion plans, as it’s a tough market to crack.

3i has also been hit by wider stock market uncertainty. The stock tends to fall faster than the index on bad days, and climb faster on good ones. But here’s the exciting bit, in my view. The investment trust now trades at a 15.8% discount to the underlying value of its net assets. For years, it traded at a premium. I think it’s well worth considering for investors up for the challenge. I’ve taken advantage of recent dips to buy more myself. So have 3i’s directors.

History shows that even if we do get an outright crash, it won’t last forever. Whatever happens next week, I’ll be watching closely to see which shares emerge as the best bargains.

The post Are we approaching a full-blown stock market crash? appeared first on The Twelfth Magpie.

The current yield is only 3.03%. But I don’t think that even remotely covers the potential opportunity on offer right now.

Dividend investing

High dividend yields bring attractive reinvestment opportunities. If you invest £10,000 in a stock with a 7.5% yield, you get £750 in the first year.

Reinvesting this takes your portfolio to a total of £10,750. This, however, isn’t the only way for dividend investors to achieve this kind of return.

If you invest the same £10,000 in a stock with a 2.5% yield, you get £250. But if it raises its dividend by 5%, the end result might be the same.

For the dividend yield to stay the same, the share price has to go up in line with the increase. That takes the value of your investment to £10,500.

Adding in the £250 dividend results in £10,750 – a 7.5% return in the first year. That’s how a stock with a lower yield can match a higher one.

Warren Buffett

Yes, there are a l,ot of ‘ifs’ here. But in the 2023 letter to Berkshire Hathaway shareholders, Warren Buffett described exactly this process. 

In 1994, Berkshire completed a $1.3bn investment in Coca-Cola. In the first year, this generated $75m in dividends. 

By the end of 2022, the dividend had increased to $704m. But – as Buffett pointed out – the real return came from the rising share price: “These dividend gains, though pleasing, are far from spectacular. But they bring with them important gains in stock prices. At year-end, our Coke investment was valued at $25bn.”

Share prices don’t automatically follow dividends of course – that’s not how the stock market works. But over time, they tend to reflect changes in the underlying business. 

What’s the stock?

That brings me to the stock I’ve got my eye on in May. It’s 3i (LSE:III) – a FTSE 100 private equity firm.

A 3.03% dividend yield isn’t particularly exciting. But since 2021, the company has increased its dividend per share by 107.07%.

That’s an average of 15.44% a year. It’s therefore no coincidence that the stock is up by almost the same amount – 102.96%. 

Source: FIscal.ai

That’s an outstanding result. But it’s not an accident – it comes from the fact that 3i invests its own capital, rather than raising cash from investors.

That means it can buy and sell when it sees opportunities, rather than on specific timelines. This is a huge advantage and I don’t see it changing.

Risks and rewards

3i’s approach has resulted in a portfolio that’s heavily concentrated in a European retailer called Action. And that can bring risks.

Action’s growth has faltered a bit this year and that’s why 3i’s share price is down. But the firm’s core strength is still very much intact.

That’s why the stock falling 18.94% since the start of the year is catching my attention. And I think dividend investors should take a look.

The post Dividend stocks: here’s my top name to consider buying in May appeared first on The Twelfth Magpie.

Read on and I’ll tell you why I’m bullish on this pair. 

Buying the dip

First, I added 3i Group (LSE:III) to my portfolio. The FTSE 100 stock is down 35% in six months, even after a mini-revival recently.

3i is a private equity firm that invests in other companies. Over the past 10 years, the group’s annualised total return is a very impressive 22%, despite the crash.

A major driver has been Dutch discount store chain Action. In 2011 when 3i first invested, it had 250 stores across three countries and around €80m in EBITDA. At the end of 2025, it had 3,302 stores in 14 countries and generated more than €2.3bn in underlying profit.

In fact, the investment has been so successful that it now accounts for approximately 73% of 3i’s portfolio. So any growth hiccups at Action are bad news. And that’s what we’ve had in recent months, with weaker-than-expected growth in France, its largest market.  

However, I think the selling has gone too far. It means 3i has swung from trading at a massive premium to its underlying assets to a near-10% discount. It also now carries a 3.3% forward dividend yield. 

Taking advantage of this, long-time CEO Simon Borrows recently bought £8.95m worth of shares, which is obviously noteworthy because he knows the company (and its prospects) inside out.

Finally, it’s worth pointing out that Action sees scope for 4,650 stores. So it’s hardly struggling.  

Fitness boom

The second stock I bought is Applied Nutrition (LSE:APN), the leading sports nutrition and supplements brand. The stock’s up 97% in the past year.

However, it dipped 5% earlier this week after shareholder JD Sports unloaded its entire 9.1% stake. Does JD see trouble brewing? Maybe it’s worried about the inflationary Iran conflict hurting Applied Nutrition’s growth or margins. This is a near-term risk.

Alternatively, perhaps JD just crystallised returns after the stock’s strong run. Either way, I’m not worried because I’m investing for the long term. And the global sports nutrition, health and wellness market is projected to grow to £279bn by 2029, at a compound rate of about 8.1%.

What I like is that Applied Nutrition’s growing globally, with its products selling well in Europe, the Middle East, Latin America, and the US (it has shelf space in Walmart). It’s very innovative, bringing out unique flavours and quickly capitalising on new trends in the fitness and wellness markets. 

Crucially, the brand is very trusted. Customers know what they’re getting is the real deal, which is not always the case when it comes to protein and supplements. 

I buy Applied Nutrition’s protein, creatine, and daily greens supplement (because I don’t eat anywhere near enough vegetables!) But nearly half of customers are female, boosted by Coleen Rooney-branded collagen beauty supplements.  

This year, revenue is expected to surge 31% to £140m. The profitable company is trading at 17.7 times forward earnings, which isn’t very expensive for a quality business with a ton of international growth potential.

I’ll look to build out my position on share price dips over the next year or two. 

The post 2 excellent FTSE 350 stocks I just added to my ISA appeared first on The Twelfth Magpie.

Yet the Footsie‘s still a great place to go shopping for bargain stocks. Some top blue-chip shares still trade cheaply despite strong recent price gains. Other quality shares have also fallen in value, providing great dip-buying possibilities for bargain hunters.

3i Group (LSE:III), Standard Life (LSE:SDLF), and HSBC (LSE:HSBA) are three of my favourite FTSE 100 shares to consider today. Want to know why?

3i Group

3i is an investment company specialising in US private equity. Over the last year, it’s fallen by almost a third in value, meaning its share price is 21% lower than its net asset value (NAV) per share.

The firm’s problem right now is slowing sales at Action, a Dutch discount retailer. This is by far 3i’s largest holding, so you can see the problem. But has the market overreacted? I think so.

Action’s like-for-like sales growth halved in 2025, to 5% from the year before. They could remain under pressure, too, as inflation rises. But the long-term earnings potential here remains vast, spearheaded by the company’s planned move into the US. I think it’s worth serious attention at current prices.

Standard Life

Standard Life’s share price has rocketed 27% over the last 12 months. Yet the financial services provider still offers terrific value based on expected profits and projected dividends.

Its forward price-to-earnings (P/E) ratio is 9.7, and its P/E-to-growth (PEG) multiple is well inside bargain territory of below one (0.3). Meanwhile, its prospective dividend yield is 7.8%, currently the second highest on the FTSE 100.

Without doubt, the risks facing Standard Life are rising as the Iran war continues. The conflict could impact demand for its savings and retirement products if consumers tighten their belts. However, over a longer time horizon, I think the investment case remains intact and is worth considering. In my view, earnings could surge as the UK’s rapidly ageing population supercharges market growth.

HSBC

HSBC shares also provide plenty of bang for your buck. The P/E and PEG ratios for 2026 are ultra-low, at 11.7 and 0.7 respectively. And the dividend yield for this year is 4.5%, trumping the FTSE 100 average around 3%.

Like any retail bank, HSBC faces the threat of poor loan growth and rising impairments as the Iran war boosts inflation and hits growth. On the plus side, a likely rise in interest rates will help margins, though the overall impact could still be negative.

But I still think HSBC, whose share price is up 71% over the last year, could be a brilliant bargain. Why? Its large (and growing) focus on Asia could deliver enormous returns, where wealth and population levels are growing rapidly over time. I don’t think this is reflected in the bank’s rock-bottom valuation.

The post The FTSE 100’s up 27%, but these top blue chips are still dirt cheap appeared first on The Twelfth Magpie.

But investing can be daunting, particularly in today’s market. The FTSE 100 recently dropped more than 10% from its high, prompted by the Middle East conflict, higher oil prices, and the risk of stickier inflation and interest rates.

The more domestically focused FTSE 250 has been hit even harder as investors worry about the UK economy. It’s exactly the kind of turbulance that tempts people to sell everything and hide in cash.

The Buffett playbook

Buffett’s playbook is very different. He tells investors to “be fearful when others are greedy and greedy when others are fearful“.

In other words, stay calm, ignore the noise, and use the dip to buy quality companies at a discount. He often noted how bad news can be an investor’s friend, making quality stocks available at bargain prices.

Right now, some UK shares look priced for disaster, despite decent fundamentals. 

High earnings, low prices

The private equity giant 3i Group (LSE: III) has grown roughly 469% over the past decade, yet the shares are down close to 30% since last April. Analysts put its forward price‑to‑earnings (P/E) ratio for 2026 at around four times — extremely cheap for a long‑term growth winner.

Crucially, recent numbers don’t point to a business in trouble. In the year to March 2025, it reported a 25% total return on shareholders’ funds and strong growth in net asset value per share. Its main holding, European discount chain Action, continues to grow sales and profits at double‑digit rates.

In fact, 98% of its holdings grew earnings in the 12 months to mid‑2025. So this price drop seems to be more about sentiment and higher rates than any obvious operational issues.

A tough market

Vistry, the UK housebuilder, is another example. One valuation service puts its forward P/E at about 5.3, implying investors are very cautious on future profits. This is despite a solid order book and plans for revenue and volume growth. 

In the same vein, easyJet trades on a forecast P/E of roughly five. But revenue and earnings are expected to recover if oil prices drop and travel demand rebounds.

Both are exposed to macroeconomic risks like higher energy costs and a weaker consumer, but those low multiples suggest a lot of bad news is already priced in.

Of course, nothing is guaranteed. 3i Group is heavily reliant on Action and a concentrated portfolio, so a serious downturn in European consumer spending or a sharp fall in private‑equity valuations could hurt. 

And if rates stay higher for longer or geopolitics worsen, all three shares could remain volatile for some time.

No risk, no reward

Buffett likes passive income because it buys freedom: dividends, interest, and long‑term growth can keep flowing whether you’re at your desk or fast asleep.

Market dips like the current correction can be a rare opportunitiy to build an income stream with strong businesses at low prices.

But it also requires risk management — spreading money across sectors, keeping some defensive shares and cash, and accepting that volatility is normal rather than something to fear.

The post This is what Warren Buffett has to say about passive income — and I’m listening! appeared first on The Twelfth Magpie.

The biggest faller has been Barratt Redrow, which has crashed 30.6%. The housebuilder was already enduring a “subdued trading environment” back in February. With inflation rising and rate cuts on hold (or worse), mortgages are probably going to become even less affordable.

Similarly, two other housebuilders have sold off: Berkeley (-20.4%) and Persimmon (-19.2%). Leading property search platform Rightmove (-18.5%) makes an appearance, but it’s also been caught up in the AI-will-destroy-software panic.

Speaking of which, Experian (-22%), Sage (-21.3%), Auto Trader (19.5%), and RELX (-17.5%) also join this list. Investors fear autonomous AI agents could potentially cut out data platforms, or at least make their datasets less valuable.

This is probably unlikely for these four, in my opinion, but investors aren’t waiting around to find out. The technology definitely presents pricing power challenges (as well as opportunities) for some software companies.

Elsewhere, gambling group Entain has slumped 24.7% year to date, with concerns rising about the surging popularity of prediction markets across the pond. Former FTSE 100 peer Flutter Entertainment has crashed 53% in 2026!

Other abandoned names include Metlen Energy & Metals (-24.5%), Intertek (-19.7%), JD Sports Fashion (-16.6%), Pershing Square (16.3%) and private equity specialist ICG (-21.6%).

My favourite

Eagle-eyed readers will have spotted that I’ve only mentioned 14 FTSE 100 stocks. So which is my hidden favourite?

Well, I do like Experian, RELX, and ICG, while still holding shares in Pershing Square and Sage. But I’m going with 3i Group (LSE:III), which has bombed 21% year to date.

Private equity trust 3i has sold off because top holding Action is reporting slowing like-for-like sales. And the Europe-based discount retailer intends to invest up to €400m entering the US market over the next few years.

Both of these things add risk, especially if higher European energy and transport costs put further pressure on margins. However, a bit of perspective is needed here. In 2025, Action achieved net sales of €16bn and EBITDA of €2.37bn, up 16% and 14% year on year respectively.

It also intends to expand to 4,650 stores across Europe, up from 3,302 at the end of 2025. It had €900m in cash and cash equivalents in March and plans to make another dividend payment to shareholders in the coming weeks (including, of course, majority shareholder 3i).

Speaking of dividends, 3i’s forward yield has risen to 3.7%. Combine this with a sizeable 23% discount to net asset value, and I think the stock now deserves close attention.

Finally, it’s worth noting that CEO Simon Borrows bought 350,147 shares last week, for a total value of £8.94m. That’s certainly a head-turning sum.

But that’s not all, because on Monday (30 March) senior partner Peter Wirtz splashed out £584,722 on 25,000 shares. Clearly, these vastly experienced insiders think 3i is significantly undervalued right now.

I agree, and intend to follow them by making 3i my first investment this month. Mind you, it will be inside my Stocks and Shares ISA, so will be a tad lower than £8.9m!

The post 15 FTSE 100 stocks have fallen 15% or more this year. Here’s my favourite appeared first on The Twelfth Magpie.

With the outcome of the Iran conflict still uncertain, markets could fall further and shares may get cheaper still. But if we see a swift resolution, even an imperfect one, prices could rebound quickly and the opportunity may disappear.

Investors can take two simple steps to protect themselves. First, drip-feed money into the market rather than investing a large lump sum all at once. Second, invest with a long-term mindset, giving markets time to stabilise and allowing both share price growth and dividend income to compound. In truth, that’s the best approach to buying shares at any time.

Going shopping for shares

Many FTSE 100 stocks look remarkably cheap, measured by their price-to-earnings (P/E) ratios. Insurer and asset manager Legal & General Group has a P/E of just 0.3, while yielding more than 9%. Consumer goods giant Reckitt Benckiser trades on a P/E of only 0.6 and yields 4.25%, far higher than it has for years. Both are established blue-chips. While they have faced challenges recently, today’s ultra-low valuations make them worth considering for long-term investors, in my view.

The bargains don’t stop there. Private equity specialist 3i Group (LSE: III) is usually eye-wateringly expensive, but the recent sell-off has hit the shares hard. This is despite the strength of its biggest holding, European discount retailer Action, which remains very profitable and is now expanding into the US.

Typically, investment trust 3i Group trades at a significant premium to its underlying net asset value. However, with the shares down by a third over the last year, it trades at a massive discount of around 24%.

On Monday (30 March), CEO Simon Borrows bought 350,147 ordinary shares in 3i, spending a striking £8.94m. He clearly believes there’s significant value at current levels.

3i Group is on a big discount

This is the largest holding in my SIPP, so the sell-off has been painful. I’m sticking with 3i because I believe the market reaction has been overdone. The US expansion story is particularly compelling, even if it’s a notoriously difficult market to crack. There are signs of a slowdown in Europe, but the scale of the recent decline looks excessive to me. For brave, growth-focused investors with a long-term outlook, I think 3i Group is worth considering.

There are plenty more attractively valued FTSE 100 names. JD Sports Fashion trades on a P/E of 6.6, International Consolidated Airlines Group trades at 6.8, IG Group at 6.9, NatWest at 9.1, Barclays at 10.1, Imperial Brands at 10.6 and BT Group at 11.5. Here are three more to consider: GSK (11.9), Persimmon (12.1) and Bunzl (12.3) may not be dirt cheap, but they still appear good value in today’s market.

Today, global markets are rising on hopes of some kind of peace deal. Whether that optimism proves justified is anybody’s guess. But if markets continue to recover, today’s bargains may not last. In the short run, nobody knows what will happen next but history shows that buying quality shares at low valuations pays off over time. That’s why, despite the risks, this could be a compelling moment.

The post 10 dirt-cheap shares to consider after the correction appeared first on The Twelfth Magpie.

Here are two cheap shares that stand out to me as worth looking at in April.

FTSE 100

After delivering years of market-thrashing returns, 3i Group (LSE:III) stock has suffered two massive drops in six months. The first came in November following the release of 3i’s half-year results, while the second leg down came last week.

Since October, this FTSE 100 stock has crashed 47%, marking one of the worst pullbacks in the private equity firm’s long history.

The reason is slowing growth at Action, the discount retailer that dominates 3i’s portfolio. It expects like-for-like (LFL) sales growth between 4% and 5% this year, which would mirror 2025. Business has been weaker than expected in France, its largest market.

For context, Action’s LFL sales growth was 10.3% the year before. So investors appear worried about this slowdown, as well as the retailer’s intention to invest between €350m and €400m by 2030 to enter the hyper-competitive US market.

3i has swung from trading at a 50% premium to the value of its portfolio to a 24% discount today. Even if Action’s implied valuation falls slightly to reflect slowing growth and US execution risk, I think there’s now an attractive margin of safety here.

If we strip out France, Action’s LFL sales growth was still a healthy 5.8% in the first 12 weeks of 2026. And management sees scope for 4,650 stores across Europe, up from 3,302 in December.

So this should be a more valuable business a few years from now, especially if it keeps attracting more bargain-seeking shoppers as inflation bites across Europe.

Another attractive thing worth mentioning is the income on offer. 3i Group owns 29.2% of 3i Infrastructure, the progressive dividend-paying investment trust from the FTSE 250. After the crash, the forward yield has crept up to around 4%, adding to the investment case.

In December I wrote that I would buy 3i stock if it sold off during a crash. Well, we haven’t had a complete market meltdown, but the stock has cratered 26% since then.

Putting my money where my mouth is, I’m going to invest in April.

FTSE 250

Down 18% since November, the second stock that looks too cheap to me is Frasers Group (LSE:FRAS). This is the sprawling retail group that owns Sports Direct, upmarket Flannels, and Evans Cycles, the UK’s leading specialist bike shop.

Frasers has also accumulated big stakes in ASOS, Mulberry, Debenhams (formerly Boohoo), Hugo Boss, Puma, and others. The danger, of course, is that consumer spending could be about to take another hit due to the war in Iran.

Despite this risk, the stock looks ridiculously cheap at just six times forward earnings, despite Frasers continuing to grow (particularly overseas).

There’s no dividend on offer here, but this frees up cash for Frasers to keep buying shares of retailers that it thinks are in the bargain basement. This includes its own, with £70m of its shares being repurchased between December and April.

Frasers is well managed, solidly profitable, and increasingly geographically diversified. The stock is 75% below City analysts’ current 12-month price target. Taking a long-term view, I think it looks sorely undervalued.

The post 2 dirt-cheap stocks to consider buying for an ISA portfolio in April appeared first on The Twelfth Magpie.