Stock market risks have grown for investors following the Middle East conflict. Its impact on inflation and global growth mean corporate profits may come under significant pressure. Yet, I believe this uncertain outlook is more than reflected in some shares’ current valuations.
Take 3i Group (LSE:III) and Allianz Technology Trust (LSE:ATT) as just two examples. In my view, these FTSE 100 and FTSE 250 companies are changing hands far too cheaply at current prices.
Want to know why they could look good in a Stocks and Shares ISA?
Too cheap?
3i’s plummeted 29% so far in 2026, making it one of the FTSE 100’s five worst performers. The reason? A sharp slowdown in sales growth at discount retailer Action, the investment trust’s single largest holding.
Roughly 75% of 3i’s capital is locked up in the retailer. The thing is, trading at Action hasn’t been shockingly bad, with like-for-like sales growth of 4.9% in 2025. In my view, 3i’s price retracement reflects a resetting of investor expectations over Action’s revenues moving forwards following its recent breakneck performances. LFL growth was a brilliant 10.3% in 2024.
Yet, has the scale of the share price correction been overblown? I think it might, with 3i shares now trading on a forward price-to-earnings (P/E) ratio of 4.3 times.
This looks especially cheap to me given the resilience of 3i’s broader portfolio. The trust, which holds stakes in more that 50 different companies, grew net asset value (NAV) per share by 19% in the last financial year (to March 2026).
During the last 10 years, 3i shares have delivered an average annual return of 18%. This is a high-quality trust I expect to keep delivering. However, worries over Action could dampen near-term performance.
A 9.2% discount opportunity?
Allianz Investment Trust (LSE:ATT) is another stock market bargain to consider in my view. It’s actually soared 39% in value so far this year, and yet it still looks dirt cheap, trading at a 9.2% discount to its NAV per share.
The trust focuses on high-growth tech shares, more specifically those in the US. We’re talking about industry leaders like chip manufacturer Nvidia, software giant Microsoft, and consumer electronics play Apple.
This diversified approach (it holds 43 shares in all) has seen it thrive on a multitude of sector trends, including the growth of artificial intelligence (AI), e-commerce, cloud computing, and cybersecurity. The result? It’s delivered a hefty average annual return of 28% over the last decade.
In 2026, Allianz Investment Trust has exploded higher thanks to by blowout earnings releases from Silicon Valley’s tech titans. More specifically, key holdings have been boosted by the accelerating adoption of AI and the boost it’s given to earnings.
