The FTSE 100 is near its lowest in a year! I’d buy these shares now

looking at the FTSE100In the 52-week range of , the index trades fairly close to its lowest point in the last year.

That’s not surprising, given what has been happening in the stock market lately.

• High inflation is driving up costs, causing consumer spending to fall.
• Rising interest rates are making access to foreign capital more expensive.
• Supply chain disruptions are causing manufacturing delays globally.
• The labor shortage is affecting profit margins.
• Volatility in currency exchange rates is hurting earnings.

With all of these problems occurring simultaneously, it’s no wonder the FTSE 100 Index has been falling. However, it is important to remember that these problems are ultimately short-term in nature. And there are some early indicators that the current situation is slowly improving.

In other words, the index may be poised for a comeback in the coming months. As such, the window of opportunity to capitalize on low stock prices may already be closing. With that in mind, here are two leading stocks that I think are poised for an impressive long-term rally before reaching new heights.

Hikma Pharmaceuticals (LSE:HIK) has had quite a rough year, with its stock basically cut in half. Part of this adverse move is likely to be just general stock market volatility. But another reason investors appear to be bearish is the state of its US generics division.

Following increased competition, this part of the business has underperformed. Fortunately, its Injectables and branded segments continue to command attention. And that’s pretty encouraging, given that this is where management’s long-term strategy is focused.

The generics division is responsible for about a third of sales, so it’s worrying to see a double-digit slowdown. However, the group is launch of a series of new products Things are expected to change in the coming months.

Assuming this succeeds and its other segments continue to outperform, then this business could trade at a pretty attractive discount today. Of course, there is no guarantee. And the share price may fall further if the group fails to meet expectations.

All that said, I think the risk is worth the reward for my portfolio. Hikma has a strong track record of successful product launches, and given continued double-digit growth in its other divisions, the collapse in share price makes this business look like a bargain if you had capital available to invest today.

Return to the state of affection?

During years Melrose Industries (LSE:MRO) was considered a world-class engineering company. As a reminder, the group acquires struggling companies and tries to turn them around before selling them later for a higher price.

Unfortunately, engineering was one of several industries that was absolutely decimated by the pandemic. And even today, the FTSE 100 firm continues to endure disruptions that have reduced its share price by another 37% in the last 12 months.

But after a quick business shakeup, Melrose appears to be on the mend. Profitability is still a shadow of what it was before, but is significantly higher than in 2020.

Management has taken on debt to fuel its recovery, which adds additional risk, especially with rising interest rates. However, in my opinion, the worst is over for the company. And assuming there are no more keys in the works, I think Melrose is still an excellent stock to have in my portfolio.