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The FTSE 100 index of UK shares has delivered bumper returns in 2025. Up 18%, it’s on track to ship its finest efficiency since 2009.
But regardless of these positive factors, the Footsie’s nonetheless an incredible place to hunt for bargains, for my part. Take Fresnillo (LSE:FRES), Rio Tinto (LSE:RIO) and Babcock Worldwide (LSE:BAB) as an example, which right this moment commerce at rock-bottom costs.
Wish to know what makes them high low cost shares to contemplate? Learn on…
Fresnillo
Rocketing gold and silver costs have supercharged Fresnillo’s share value 398% in 2025. But primarily based on subsequent yr’s earnings, the Mexican miner’s shares nonetheless look dust low cost. Metropolis analysts forecast a 36% earnings enhance in 2026. This leaves it buying and selling on a price-to-earnings development (PEG) ratio of 0.6, properly inside cut price territory of 1 and under.
There’s no assure after all that treasured metals will maintain rising. A resurgent US greenback alone might put paid to additional value will increase, denting Fresnillo’s earnings forecasts. However on steadiness, I’m anticipating one other yr of monster positive factors. Gold’s simply touched new peaks above $4,500 an oz.. Silver’s burst above $72 for the primary time, too, as investor jitters develop.
Rising tensions surrounding US financial and overseas coverage, expectations of sustained rate of interest cuts, and powerful gold shopping for from central banks might all drive extra vital value positive factors in 2026.
Rio Tinto
Surging commodity costs have additionally lifted Rio Tinto, up 25% since 1 January. But with a PEG ratio of 0.8 for 2026, the mega-miner nonetheless affords phenomenal worth. A 5.2% dividend yield underlines its standing as a high worth inventory.
Industrial metals are rocketing in value as provide pressures mount. Copper — a key commodity for the FTSE 100 miner — simply struck new peaks above $12,000 a tonne. And costs are tipped to maintain rising as manufacturing issues persist, worsened by an absence of latest capability coming on-line, and demand from China picks up.
Metropolis brokers suppose Rio Tinto’s earnings will rise 16% subsequent yr. Be conscious although, that recent bickering round commerce tariffs would possibly put estimates at risk.
Babcock Worldwide
Babcock Worldwide’s been one of many best-performing large-caps in 2025. Up 150%, its ascent displays the corporate’s huge low cost to the broader defence sector.
The corporate now trades on a ahead price-to-earnings (P/E) ratio of twenty-two.6 instances. That doesn’t scream worth on paper, positive. Nevertheless it nonetheless means Babcock shares nonetheless commerce at a big low cost to the broader European defence business (30 instances).
The defence sector’s extremely aggressive, and UK specialists might fall behind in the event that they miss out on the EU’s defence fund. However enhancing relations between the UK and union members, mixed with the strategic necessity of such a deal, means entry’s greater than possible, for my part. This might give the share costs of FTSE 100 corporations like Babcock an additional vital shot within the arm.
Reflecting a robust outlook for defence spending, Metropolis analysts anticipate Babcock’s earnings to rise 10% this monetary yr (to March 2026), and one other 11% in fiscal 2027.
