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The FTSE 100 index of UK shares has delivered bumper returns in 2025. Up 18%, it’s on course to deliver its best performance since 2009.
Yet despite these gains, the Footsie’s still a great place to hunt for bargains, in my view. Take Fresnillo (LSE:FRES), Rio Tinto (LSE:RIO) and Babcock International (LSE:BAB) for instance, which today trade at rock-bottom prices.
Want to know what makes them top cheap shares to consider? Read on…
Fresnillo
Rocketing gold and silver prices have supercharged Fresnillo’s share price 398% in 2025. Yet based on next year’s earnings, the Mexican miner’s shares still look dirt cheap. City analysts forecast a 36% profits increase in 2026. This leaves it trading on a price-to-earnings growth (PEG) ratio of 0.6, well inside bargain territory of 1 and below.
There’s no guarantee of course that precious metals will keep rising. A resurgent US dollar alone could put paid to further price increases, denting Fresnillo’s profits forecasts. But on balance, I’m expecting another year of monster gains. Gold’s just touched new peaks above $4,500 an ounce. Silver’s burst above $72 for the first time, too, as investor jitters grow.
Growing tensions surrounding US economic and foreign policy, expectations of sustained interest rate cuts, and strong gold buying from central banks could all drive more significant price gains in 2026.
Rio Tinto
Surging commodity prices have also lifted Rio Tinto, up 25% since 1 January. Yet with a PEG ratio of 0.8 for 2026, the mega-miner still offers phenomenal value. A 5.2% dividend yield underlines its status as a top value stock.
Industrial metals are rocketing in price as supply pressures mount. Copper — a key commodity for the FTSE 100 miner — just struck new peaks above $12,000 a tonne. And prices are tipped to keep increasing as production problems persist, worsened by a lack of new capacity coming online, and demand from China picks up.
City brokers think Rio Tinto’s earnings will rise 16% next year. Be mindful though, that fresh bickering around trade tariffs might put estimates in danger.
Babcock International
Babcock International’s been one of the best-performing large-caps in 2025. Up 150%, its ascent reflects the company’s enormous discount to the broader defence sector.
The company now trades on a forward price-to-earnings (P/E) ratio of 22.6 times. That doesn’t scream value on paper, sure. But it still means Babcock shares still trade at a large discount to the broader European defence industry (30 times).
The defence sector’s highly competitive, and UK specialists could fall behind if they miss out on the EU’s defence fund. But improving relations between the UK and union members, combined with the strategic necessity of such a deal, means entry’s more than likely, in my view. This could give the share prices of FTSE 100 companies like Babcock a further significant shot in the arm.
Reflecting a strong outlook for defence spending, City analysts expect Babcock’s earnings to rise 10% this financial year (to March 2026), and another 11% in fiscal 2027.
