Cheap shares like this FTSE bank could help ISA investors get rich by 2025

I FTSE 100 I made a strong start in 2024 but the last months of the year were difficult. A total return of around 10%, including dividends and stock purchases, is roughly double the yield from cash and bonds. But it was overshadowed by the US’s stellar performance.

Wall Street has been riding guns for the past decade, driven by the almost unbelievable performance of mega-cap tech stocks like Nvidia again Tesla.

However the UK has had its winners too, with the owner of British Airways International Airlines Consolidated Group and a jet engine manufacturer Rolls-Royce have grown by 95% and 90% respectively this year. Both have benefited from post-pandemic recovery in the aviation sector.

2024 was much better than looking at UK stocks

While many investors measure performance by how well a major national index has done, it’s irrelevant to people like me who prefer to pick their own stocks rather than buy trackers.

Although it can be very beneficial, it is also dangerous. My best FTSE 100 performer this year is an independent equity specialist 3i Groupup to 50%. Too bad for me JD Sports Fashiondown 40%. So where will I shop today?

To me, it’s a no-brainer: JD Sports. Its shares have taken a hit as consumer spending has been cut, a key partner Nike problems, the Budget increases employers’ national insurance bills, and Donald Trump has threatened trade tariffs.

Yet JD Sports is now incredibly cheap, trading at eight times earnings. It looks like a bargain purchase with good recovery prospects. And it’s not the only FTSE 100 stock that fits that profile.

Lloyds Banking Group (LSE: LLOY) has been sold off in recent months, as their Dark Horse division has been embroiled in a car sales scandal.

Lloyds could be the winner in 2025

Lloyds has set aside £450m for potential fines and customer compensation, but that may not be enough. RBC Capital Markets has warned Lloyds it could take £3.2bn. It ranked FTSE 100 rival Barclays down by just £400m.

Lloyds’ share price is up nearly 12% year to date, and a trailing dividend yield of 5% has increased my total return to 17%. Barclays investors enjoyed a 70% return. The shame of mis-selling is not the only difference between the two, but it is the biggest.

However I am still holding on to my Lloyds shares and would buy more within my Stocks and Shares ISA if I had the cash. They look cheap, trading at 7.1 times earnings, while the leading yield is 6.1%. Shareholder payouts look strong, covered 2.1 times by earnings.

Lloyds is facing risks. A car finance scandal can turn into a real car accident. A downturn in the UK economy could increase credit defaults. Lower interest rates may reduce margins. So it is compatible with all stocks.

The all-conquering US faces risks too. Whether the Trump administration succeeds or fails, one thing is certain. There will be bumps. As well as S&P 500 it costs twice as much as the UK to begin with. Hopefully the FTSE 100 will close the gap in 2025, with reduced stocks such as Lloyds leading the way.