Vodafone’s (LSE: VOD) share price fell 7% on the release of its Q3 fiscal year 2025 results.

I thought the numbers unveiled on 4 February were positive overall. The share price’s mini-rally since then appears to indicate that others share my view.

That said, the stock is still down 13% from its 17 September one-year traded high of 79p. This may provide a bargain buying opportunity to consider for those whose portfolio the stock suits.

A closer look at the results

A 6.4% year-on-year revenue decline from its German operations weighed on the quarterly figures.

This was due to a legal change forbidding landlords from passing on cable TV fees to tenants. It remains a key risk to the firm, in my view.

However, the firm’s total revenue jumped 5% to €9.8bn. Another positive for me in Q3 was the sale of Vodafone Italy to Swisscom for €8bn. The proceeds will be used to reduce net debt and to begin a share buyback of up to €2bn. These tend to support stock price gains.

Also promising was the final regulatory approval of the firm’s merger with Three in the UK. This will create the UK’s largest mobile phone operator and should bring cost and coverage benefits for the new entity, I think.

Are the shares undervalued right now?

On the price-to-book ratio, Vodafone trades at just 0.4. This is bottom of its peer group, which averages 1.8. These peers comprise Orange at 0.9, BT at 1.2, Telenor at 2.6, and Deutsche Telekom at 2.7.

So, Vodafone looks a major bargain on this measure.

The same is true on the price-to-sales ratio too, with the firm at 0.6 against a peer average of 1.3. And its also looks very cheap on its price-to-earnings ratio of 8.9 compared to its competitors’ 19.9 average.

To translate all this into share price terms, I ran a discounted cash flow valuation using other analysts’ figures and my own.

This shows Vodafone shares are technically 54% undervalued at 69p. Therefore, the fair value for the stock is £1.50.

Market unpredictability may push the shares lower or higher than this. However, it confirms to me that they look a serious bargain right now.

Will I buy the stock?

My age – over 50 – is the key factor why I will not buy this stock at its current bargain price. I am now in the later part of my investment cycle, which means two things to me.

First, I am focused on reducing my working commitments by increasingly living off stock dividends. Analysts project Vodafone’s annual yield will be around 5.5% in each of the next three years. This compares well to the FTSE 100 average of 3.6%. But it is much less than the circa 9% average I receive from my high-yield stocks.

Second, the price volatility risk on a sub-£1 share is unacceptable to me. At 69p, each penny of Vodafone’s share price represents 1.4% of the stock’s value.

So, it does not look like an unmissable bargain to me now. However, if I were younger, it might appear so.

Billionaire investor Warren Buffett once said: “Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.”

Is he right? Take Lloyds Banking Group (LSE:LLOY) as an example.

With an estimated 2.3m shareholders – more than any other company — the bank could be described as the UK’s most popular share.

If Buffett’s to be taken literally, he’s suggesting that investors aren’t going to make much money out of the Black Horse bank. But he’s a ‘value investor’ and looks for stocks that are undervalued by the market.

And on this basis, the bank has lots going for it.

Crunching the numbers

Based on its balance sheet at 30 September 2024, Lloyds currently (10 February) has a price-to-book ratio of just 0.82.

This means if it ceased trading today, sold off all its assets and used the proceeds to settle its liabilities, there’d be 77p a share left over to return to shareholders. That’s a 22% premium to today’s share price.

And when it comes to dividends, I also think it offers good value. Analysts are expecting a total payout for 2024 of 3.09p. If correct, it means the stock’s presently yielding 4.9%, comfortably above the FTSE 100 average.

Looking ahead to FY27, the average of the 18 analysts’ forecasts is for a dividend of 4.26p. This implies a very healthy forward yield of 6.8%.

It’s a similar story when it comes to earnings. Based on expected earnings per share for 2024 (6.6p), the bank trades on a price-to-earnings ratio of 9.5. This is comfortably below, for example, Bank of America (14.5), which is a stock Berkshire Hathaway, the investment vehicle of which Buffett is chairman and chief executive, has a $31.7bn stake (at 30 September 2024).

Another interpretation

But returning to Buffett’s quote, I think what he’s really trying to convey is that it’s best to ‘get in early’ and buy a stock before others notice it’s undervalued. Given that Lloyds was founded in 1765, anyone taking a position now for the first time cannot be accused of being an early-stage investor!

However, I suspect Buffett’s warning is about investing in shares that have already performed strongly. Although he came up with his quote long before the concept of the Magnificent 7 (Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Meta Platforms and Tesla) was invented, Berkshire Hathaway’s only invested in one of these, Apple.

But as much as Lloyds appears to be attractively valued, there are two reasons why I’m not going to buy any of its shares. Firstly, there’s a dark cloud that hangs over the bank.

The Financial Conduct Authority is currently investigating the possible mis-selling of motor finance. In addition, there have been a number of related (but separate) court cases. Keefe, Bruyette & Woods estimates that Lloyds could face fines and compensation of £4.2bn.

Secondly, it’s heavily exposed to the UK economy, which appears to be struggling at the moment. As recently as October, its own ‘base case’ estimate of 2025 economic growth was 1.3%. On 6 February, the Bank of England downgraded its forecast from 1.5%, to 0.75%. I fear a domestic economic downturn will impact Lloyds’ bottom line.

The FTSE 100 index has mostly been disappointing investors this century. On 31 December 1999, the main UK stock-market index hit a record close of 6,930.2 points, topping off a terrific decade.

Unfortunately, the brutal crashes of 2000-03 and 2007-09 sent the index plunging far below its millennial high. Indeed, the blue-chip index didn’t exceed this previous peak until 24 February 2015. Hence, I call the long years from 1999’s peak to 2015’s new highs the ‘Big W’ — what the Footsie‘s chart closely resembles — or its ‘Wilderness Years’.

The FTSE 100 hits new highs

Over the last four weeks, the UK stock market has seen strength that’s mostly been missing for years. Since closing at 8,201.54 on 14 January, the index has leapt by 7.1% to 8,781.56 as I write. Along the way, it has set multiple fresh closing and intra-day highs.

This sudden surge surprised me, as I’m used to the Footsie just plodding along. Alas, it has underperformed on the global stage for years, as the following table shows:

Index	Six months	One year	Five years
FTSE 100	7.0%	16.0%	18.5%
S&P 500	13.5%	20.8%	79.5%
Difference (UK minus US)	-6.6%	-4.9%	-61.0%

What’s clear is that the US stock market has thrashed its British rival over the past half-decade. However, the above figures all exclude cash dividends, which are far larger from Footsie firms than S&P 500 companies. But while dividends will narrow these gaps, America still reigns supreme.

Make London great again?

Good news: after this recent spurt, the FTSE 100 has started beating the S&P 500. Over one month, the gains are 6.5% for the UK index and 4.1% for the US, while the year-to-date rises are 7.4% and 3.2%. What might explain this sudden shift?

I’ve heard various reasons for this abrupt turnaround. Some pundits claim that global investors have finally realised how cheap UK shares are. Others see investors in US stocks worried about sky-high valuations, Trump’s trade tariffs, and stubborn inflation. Whatever the causes, it’s good to see the Footsie enjoying its days in the sun.

One British share going great guns

As an old-school value investor, I’ve argued for years that UK shares are deeply undervalued, both in historical and geographical terms. And yet go-go US growth and tech stocks continue to defy financial gravity by soaring skywards.

That said, one FTSE 100 share that I’m happy to have in my family portfolio is Barclays (LSE: BARC). Shares in the Blue Eagle bank have trounced the wider market, particularly since October 2023. Over six months, Barclays stock has leapt 38.2%, while it has rocketed by 112.9% in the past 12 months. In addition, the shares are up a market-beating 72.9% over five years.

My family bought our stake in this Big Four bank in July 2022, paying 154.5p a share. With the share price now at 304.55p, we are close to doubling our money in this ‘boring’ FTSE 100 stock. Even better, we have reinvested our generous and rising yearly dividends into buying more Barclays shares, thus turbocharging our gains.

However, with UK inflation falling, interest rates are set to fall. This will hit Barclays’ 2025-26 profits by reducing its interest income and lending spreads. Despite this, we aim to hang onto this fabulous FTSE 100 stock!

Investing in FTSE 100 shares can be a great way to make a huge passive income over time.

Its huge selection of multinational ‘old world’ stocks like banks, miners, and consumer goods manufacturers enjoy strong positions in established markets. This typically provides strong earnings growth during the long term and robust balance sheets, an essential combination for those seeking consistent dividends.

There are plenty of ways investors can mine the Footsie for a second income. Here are three investments I think savvy dividend hunters should consider right now.

High yield

The first FTSE 100 stock to look at is Phoenix Group (LSE:PHNX). At 10.3%, it has the largest forward dividend yield on the index today.

While dividends are never guaranteed, high yielders like this can — if broker forecasts prove accurate — provide a huge stream of income for investors to live off or reinvest. If they choose the latter, someone can supercharge their long-term wealth-building with bigger dividends thanks to the miracle of compounding.

Dividends aren’t guaranteed, and threats like rising competition or changing regulations could impact future payouts. But I’m confident Phoenix’s growing market opportunities and strong cash creation will continue delivering market-beating payouts.

Its shareholder capital coverage ratio was 168% as of last June, providing dividend forecasts with added steel.

Dividend grower

Successful dividend investing isn’t all about hunting large (and realistic) dividend yields, though. Successful passive income chasers also seek companies that can grow dividends over time.

This quality can offset the eroding impact of inflation on dividend income.

Safety product manufacturer Halma (LSE:HLMA) is one such company with a brilliant record of payout growth. Annual cash rewards have grown every year for 45 years. But this isn’t all: at at least 5% each year, dividends have risen at a healthy rate over the period.

This included a 7% year-on-year hike in the last financial year (to March 2024).

The forward dividend yield isn’t the biggest, at 0.8%. But this wouldn’t put me off if I had cash to invest today.

Phenomena like tightening safety regulations and efforts to tackle climate change could lead to further impressive profit and dividend growth. There’s also scope for more earnings-boosting acquisitions, although be aware that additional action on this front creates execution risk.

Risk reducer

A final way for investors to target dividends is by buying an exchange-traded fund (ETF) like the iShares FTSE 100 ETF.

Why? A diversified product like this can, through exposure to scores of blue-chip companies, minimise the impact of dividend problems at one or two companies on overall returns.

For instance, a diving oil price may damage earnings at BP, causing it to cut dividends. But the dozens of other high yielders the fund holds (like Lloyds, Aviva, Glencore, and Taylor Wimpey) help to offset the impact of weak crude prices and falling payouts from oil producers.

The dividend yield on this iShares product stands at a healthy 3.5%. On the downside, it could fall in value during a broader market downturn. But the prospect of reliable long-term dividends still make it worth serious attention in my book.

Today (10 February) was another great day for shareholders in Filtronic (LSE: FTC), as the ex-penny share jumped 12% to a 16-year high of 104p. This means it has gained nearly 700% in two years!

For those unfamiliar, AIM-listed Filtronic designs and manufactures products for aerospace, defence, space, and telecoms infrastructure markets.

The reason for this meteoric surge is down to its game-changing partnership with Elon Musk’s SpaceX. This centres around supplying radio frequency (RF) components to support SpaceX’s Starlink satellite constellation, which provides high-speed internet globally.

What happened

The stock was up big today after bagging a bumper new contract with SpaceX.

CEO Nat Edington announced: “We are delighted to have secured this substantial order, which underscores Filtronic’s reputation for delivering high-performance RF solutions to our market leading customer. This contract, alongside our growing momentum in strategic markets, provides us with increased confidence in our ability to exceed our growth targets for FY2025 and FY2026.”

The deal is valued at nearly £17m, and is the fourth contract win with SpaceX since April 2024. Clearly, this partnership with the world’s most valuable private company is deepening, which is excellent news for Filtronic shareholders.

Valuation

In light of this news, analysts have been scrambling to update their projections. For the current year (FY25 running to the end of May), broker Cavendish now sees revenue hitting £50.4m and earnings per share (EPS) of 5p. That would represent year-on-year growth of 98% and 255%, respectively.

However, for FY26, the updated forecast is revenue of £43m and EPS of 3.2p. Based on this, the stock is trading on a forward price-to-earnings (P/E) multiple of 32.5.

While that appears quite high, it obviously doesn’t factor in the likelihood of further contract wins. I wouldn’t rule that out given the trading momentum and the sheer size of the growing global defence and space markets.

What could go wrong?

On the other hand, as SpaceX revenue grows into a larger share of the pie, the risk of customer concentration increases.

If there were any potential product faults, or if SpaceX decided to manufacture their own products in-house, then that could be disastrous for the Filtronic share price.

Mega-constellation

Hardly a week goes by without SpaceX adding a few more internet satellites to its Starlink mega-constellation. On 8 February, it sent another batch of 21 into low orbit, including 13 with direct-to-cell capability.

In other words, they can connect to smartphones. T-Mobile Starlink, for example, now automatically connects in areas of the US where no cellular network reaches.

SpaceX eventually aims to have as many as 42,000 satellites, up from around 7,000 today. This will take several more years to build out.

Indirect SpaceX play

I’ve wanted to invest in SpaceX for ages (since reading The Space Barons: Elon Musk, Jeff Bezos, and the Quest to Colonize the Cosmos, a 2018 book by Christian Davenport). Unfortunately, it remains a private company, despite being valued at $350bn.

However, Filtronic arguably offers an indirect way to hitch a ride. It says its “cutting-edge technology…plays a crucial role in the deployment of SpaceX’s Starlink constellation“.

Give that is the case, the firm’s sales look set to motor higher over the coming years, assuming it doesn’t lose the contract. I’m tempted to start a position later this month.

The Greatland Gold (LSE:GGP) share price was the star performer on Monday (10 February). Having risen steadily throughout the day, by early afternoon, the company’s stock was 10% higher.

And it looks as though President Trump can claim some of the credit.

That’s because gold prices hit a record high during the morning. The precious metal was pushed higher on news that America’s Commander in Chief wants to impose a 25% tariff on steel and aluminium imports into the US.

However, at this stage, it’s unclear whether Trump intends to tax exports of gold from Australia to America. That would be a major blow to the company, albeit one that might not last for long. We’ve seen how Canada and Mexico have managed to negotiate temporary reprieves from threatened tariffs.

But some experts believe gold could climb to $3,000 an ounce. During times of crisis, it’s seen by some investors as a ‘safe haven’. Since the start of the year, it’s risen 10%.

A new era

But Greatland Gold only started production on 4 December 2024.

That was the day on which it secured 100% ownership of the Telfer and Havieron mining projects in Australia. The latter’s still in its development stage. However, Telfer was acquired as a going concern.

Since assuming full control of these mines, the company’s share price has risen 24%, from 7.5p to 9.34p. But this masks a particularly volatile period for the stock. On 20 December 2024, its shares were changing hands for 5.75p.

This level of volatility isn’t unusual for these types of stocks. I reckon mining is the most difficult industry in which to operate. There are numerous financial, operational, technical, and environmental risks to which companies in the sector are exposed. And this is often reflected in the topsy-turvy nature of their share prices.

A history lesson

Long-standing shareholders in Greatland Gold will be delighted that the company’s now starting to produce.

Next year will see its tenth anniversary as a listed company. And its journey is a good illustration of the major problem faced by early-stage mining stocks. Namely, the need to keep raising money.

It floated, in July 2006, with 100,550,000 shares in issue. Today, following numerous fund-raising rounds, it has 13,079,294,602 shares in circulation. A 5% holding at IPO would now be equivalent to 0.038%, assuming no further cash was invested.

However, with access to a $470m debt facility, the company should now be able to fund the commercialisation of Havieron — its so-called ‘flagship gold-copper project’ — without having to ask shareholders for more money. And cash flows from Telfer should also help.

Great potential?

Havieron is estimated to contain 8.4Moz (million ounces) of gold equivalent. At a current price of $2,981 (£2,404), this has a retail value of over £20bn. Of course, this doesn’t take into account the cost of getting the metals to the surface.

Endeavour Mining Corporation, the African gold producer, has an all-in sustaining cost of $1,140 (£919) an ounce. This isn’t a like-for-like comparison but it gives some idea of the likely costs involved.

Assuming all goes to plan, the pain of the various rights issues should be a thing of the past. Now, with a market cap of £1.2bn, Greatland Gold could be an excellent growth stock for investors to consider.

As older investors — both approaching 57 — my wife and I are planning for retirement. Currently, we both work, but will eventually exit the working world. Hence, we aim to build up our passive income to replace our earnings over time.

What’s our target income?

It would be tough to replace our earned income without hard work and good fortune. Still, our first goal is a passive income of £100,000 a year — easily enough to live on, even after tax.

How much capital generates £100k a year before tax? This table shows a range, based on investment returns:

Yearly return	Pot required
4%	£2,500,000
6%	£1,666,667
8%	£1,250,000
10%	£1,000,000
12%	£833,333

With a long-term return of 10% a year, we need £1m to generate £100k a year of investment income. History suggests that such high returns rarely persist, so our pot — and passive income — might start shrinking.

This table also doesn’t factor in the rising cost of living. For example, with inflation of 3% a year, the buying power of £100k today would drop to £74,409 after 10 years. Therefore, we must ensure that our income can weather stock-market storms and higher inflation.

I’ll play it safe

Based on historical data, I’m aiming to withdraw, say, 4% a year, regardless of our future investment returns. History suggests that this withdrawal rate is realistic and prudent over many decades. Indeed, such a modest withdrawal rate might allow our capital to outlast us.

Accordingly, to generate a passive income of £100k a year based on a withdrawal rate of 4% a year, we need £2.5m in income-generating assets. But this won’t be as much of a problem as it looks, because we already have some guaranteed pensions.

Pensions are passive income too

My wife and I started work in the late 1980s, building up pensions over 35 years. We should both receive the full State Pension at age 67 in 2035. By then, this will be worth over £25,000 a year between us.

My wife also has a company pension paid since 2021. This is around £25,000 a year, boosting our guaranteed retirement income above £50,000 a year. This leaves us with £50,000 a year of passive income to find elsewhere, which we can achieve.

‘Free’ money from shares

My favourite form of passive income is the cash dividends from certain shares. Though future payouts aren’t guaranteed, most FTSE 100 firms pay regular dividends. And one Footsie stock we hold for passive income is investment manager M&G (LSE: MNG).

Founded in 1931, M&G launched the UK’s first unit trust that year. It has since grown to manage financial assets worth around £350bn. After peaking at 241.1p in 2024, the M&G share price now stands at 211.6p. This leaves the shares down 3.9% over one year and 11.7% over five years.

Today, this share delivers a delicious dividend yield of 9.36% year — one of London’s highest. Furthermore, M&G’s yearly payout has risen from 15.77p a share for 2019 to 19.7p for 2023 (up 24.9%) and might keep climbing.

Of course, as a wealth manager, M&G’s success depends on (sometimes volatile) financial markets. During turbulent times, its profits have been battered by falling asset prices, most recently in 2020 and 2022. But we’re happy to own this stock for powerful passive income!

I’m a long-term investor. Flipping stocks on a day-to-day basis isn’t something I go in for. Investors with this kind of mindset sometimes miss out on short-term gains. Yet being patient and holding a stock can really pay off. For example, if an investor had put £2k in Nvidia (NASDAQ:NVDA) stock a couple of years back, here’s what it would be worth now.

Exceptional gains

Exactly two years ago, Nvidia shares were trading just above $21. The current price reflects a 510% jump over the period in question. That means the £2k would be currently worth £12.2k. It’s very impressive to think that an investment that size could turn into a five-figure sum in just the space of a couple of years.

Granted, Nvidia has been at the forefront of the AI boom over this time period. The outperformance of this sector alone can be observed when comparing the return to the S&P 500 at a broader level. The index is up 47.3%, which is a profit to be happy about. Yet the stark difference between that and Nvidia really shows the extent of the rally in the individual stock.

Another barometer to compare the return is to assess it against the Magnificent 7. This group of stocks have been the darlings of the market. Besides Nvidia, the group is Tesla, Microsoft, Apple, Amazon, Meta, and Alphabet. Over the past two years, it’s up 262%.

So even with this comparison, Nvidia still stands head and shoulders above the rest.

Digging deeper

The main reason for the gains has come from the explosive AI boom. The competitive edge that the business has, along with the ability to sell AI chips at premium prices, has helped to fuel revenue and profit growth. Demand for AI training skyrocketed with the rise of ChatGPT and generative AI, fueling orders for Nvidia’s high-performance H100 and A100 chips.

It’s worth adding that some of the rally is also down to retail investor speculation. The hype around the company is real, meaning that for many retail investors, it’s the obvious place to turn to if they want to get exposure to AI as a theme.

Looking forward, I don’t think the party is over, but I do see risks ahead. The rise of DeepSeek in recent weeks shows that the AI space is becoming increasingly competitive and at a lower price level. Even though this might not be a bad thing in the long term for Nvidia, it could spook some investors in the short term.

Another risk is that Nvidia’s first-mover advantage in the past two years was unique, and the share price performance reflects that. I struggle to see how the next two years can replicate that, as the pace of innovation and adoption is unlikely to be the same.

The lay of the land

The bottom line is that any investor who owned Nvidia shares over this time period has done exceptionally well. Although I wouldn’t sell my stock if I owned it, I’m not inclined to buy it currently as I feel there are better AI options out there.

The FTSE All-Share has been packed with exciting UK value stocks for years. And despite the index breaking new all-time highs, guess what? It still is!

The FTSE has a price-to-earnings (P/E) ratio of around 14.5 times, compared to 27 times for the far pricier S&P 500. Many individual stocks look even cheaper than that.

Just because a stock index is rising doesn’t mean individual constituents are. Take Premier Inn and Beefeater owner Whitbread (LSE: WTB). While the FTSE All-Share’s up 15% over the last year, its shares have slumped 20%.

Can Whitbread shares fight back?

Whitbread looks nicely priced with a P/E of 13.5 times earnings. But is it a value trap? Could be.

Whitbread’s set to take a hit from the Budget, as employer’s National Insurance and Minimum Wage hikes drive up costs across the hospitality sector. Employers will struggle to pass the prices on to customers, as they’re struggling too. That may continue with inflation forecast to hit 3.7% later in the summer, according to the Bank of England.

Whitbread does have a big expansion opportunities in Germany where it’s pushing Premier Inn. There’s a problem though. The German economy’s struggling too.

Long term, Whitbread could be tempting. Its five-year expansion plan targets adjusted pre-tax profit of at least £300m and £2bn in shareholder distributions by 2030. The company also aims to increase its hotel room estate to 98,000 as part of a longer-term strategy to reach 125,000.

The shares have a solid trailing yield of 3.5%. The long-term outlook may appear promising, but I’d expect short-term volatility. Especially since Whitbread’s expansion plans may call for significant capital investment, which may hit profitability and cash flow. I think investors will find better value to consider elsewhere.

B&M European Value Retail is cheaper

At least Whitbread’s still in the FTSE 100. Discount retailer B&M European Value Retail (LSE: BME) has tumbled into the FTSE 250 after a bad run. Its shares plunged 37% over the last 12 months.

Investors fled last June when the board skimped on profit guidance in a full-year 2025 trading statement that Shore Capital slammed as a “very backward looking update”.

They didn’t return even when the company reported on 4 November that group revenues for the six months to 28 September had climbed 4% to £2.64bn. The pace of growth had slowed markedly year-on-year.

Are investors being too sceptical? Possibly. B&M brought some post-Christmas cheer with a special dividend worth £151m in a trading update on 9 January. That followed a strong Q3. Nine-month revenues climbed 3.3% to £4.3bn. Yet the B&M share price continues to flounder.

With a P/E of just 8.5 times, value seekers might like to consider this one. Especially as the cost-of-living crisis drags on and consumers continue to hunt for bargains. B&M generates plenty of cash and is on track to open 73 stores this year. Interested investors should brace themselves for short-term volatility.