The Motley Fool

Buyer beware! I wouldn’t touch this FTSE 100 stock with a bargepole

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Illustration of bull and bear
Image source: Getty Images.

After another bright start to the trading day, the FTSE 100’s shrunk back again in afternoon trade. It’s now down below 5,950 points on yet more worrying news concerning the coronavirus spread. Investors are less bothered about the Bank of England’s interest rate cut than they are about news of rising infection rates.

Some scary comments from German Chancellor (and former scientist) Angela Merkel have ramped up selling in midweek trading, too. She advised that up to a whopping 70% of the Central European country’s population could become infected.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

The prospect of 58m citizens in the eurozone’s largest economy falling ill doesn’t bear thinking about. Economic conditions in Germany have been steadily deteriorating over the past year, and the COVID-19 shock threatens to almost certainly send the country – not to mention the wider euro bloc – into a punishing recession.

More bad news

At 1,457 cases, the infection rate in Germany stands at almost four times of that in the UK at present. But Merkel’s predictions should give Britons plenty to fear too. Comments from British medical experts and politicians have been much less alarming, sure. But her statement shows just how defenceless Western nations are to stop the coronavirus turning into an all-out epidemic.

It’s perhaps not a shock that retailers are suffering much of the brunt right now. Pictures of mass panic buying in supermarkets may be plastered all over newspapers and social media right now. But with people isolating themselves in ever-larger numbers – whether they carry the coronavirus or not – retail sales in the UK have taken a whack.

It’s not been all bad for British retailers, however. Indeed, those operating online have snapped up much of the business lost by physical retailers, as British Retail Consortium figures show. Sales of non-food items across stores fell 1.8% in February while retail revenues online jumped 3.6%.

Cash crisis

The timing of this news couldn’t be much worse for battered FTSE 100 stock Intu Properties (LSE: INTU). The creep of e-commerce, combined with a steady stream of retail collapses as Brexit smacked consumer confidence, has caused losses to balloon in recent times. The emergence of the coronavirus, and with it further declines in physical retail footfall, has raised more concern over its ability to fix its battered balance sheet.

The shopping centre owner was forced to cancel a much-needed £1.3bn cash call last week on what it called “current uncertainty in the equity markets and retail property investment markets.” Intu has a mountain of debt on its books that it is struggling to cope with. Its debt-to-asset ratio sat at a mighty 68% as of December. It clearly doesn’t need to be faced with a spike in the number of retail insolvencies or CVAs because of the COVID-19 crisis.

Intu’s now dealing at record lows below 6p per share. But you’d have to be extremely brave (or extremely silly) to buy its shares today. I’d much rather go dip buying elsewhere on the FTSE 100 today.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.