As stock markets crash, I’d buy these 4 FTSE 100 fallers!

After US stock markets tumbled on Wednesday, the FTSE 100 duly followed suit on Thursday. But falling share prices revealed these four bargains to me.

Innovation and new ideas lightbulb concept 2022

Image source: Getty Images

It’s been a brutal day for the FTSE 100 index. As I write, the Footsie is down 160.73 points (-2.2% ) today to trade at 7,277.36 points. This latest decline was driven by big drops in the US yesterday. The S&P 500 index lost 4% of its value on Wednesday, its biggest one-day decline since June 2020. And the tech-heavy Nasdaq Composite index closed down 4.7%. Ouch.

The FTSE 100 has been 2022’s safe haven

Here’s how the FTSE 100 has performed against four other major stock market indices in 2022 and the past 12 months (sorted by 2022 change).

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

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RegionIndex2022 change12-month change
UKFTSE 100-1.8%4.7%
JapanNikkei 225-8.3%-6.0%
EuropeSTOXX Europe 600-12.8%-2.3%
USAS&P 500-18.6%-5.7%
USANasdaq Composite-27.6%-14.9%

The FTSE 100 has been a relative safe haven so far in 2022, as well as over one year. It’s down under 2% this calendar year, versus a near-28% loss for the Nasdaq Composite index. What’s more, it’s the only major market index of these five to have risen over the past 12 months. Adding dividends of, say, 4% to the index’s 4.7% gain takes the Footsie’s 12-month return to around 8.7%. To me, that’s pretty impressive, given the market crashes elsewhere.

Bargain hunting in the Footsie

Looking at the FTSE 100’s constituents this afternoon, I see screens of red. Almost all shares in the index are down today. In fact, only seven of the 100 Footsie shares are up today, with gains ranging from 0.1% to 2.5%. Hardly a good day for UK shareholders, huh?

But the losing end of the FTSE 100 is grabbing my attention this afternoon. Among these losers, 20 shares are down at least 3.8% today, while seven Footsie stocks have lost more than 5% of their value. And all because investors are worried that the US stock market is sneezing and, therefore, London will catch a nasty cold.

Four Footsie bargains I’d buy today

As a contrarian/value/income investor, I’m always looking to buy into quality companies at discounted prices. Here are four shares I don’t own that have tumbled in value today.

CompanySectorShare price (p)12mth changeMarket value (£bn)Price/
Earnings yieldDividend yieldDividend cover
Royal MailPostal services298.99-43.1%2.93.429.2%5.6%522%
UnileverConsumer goods3421.10-20.1%87.517.45.7%4.2%136%
DiageoAlcoholic drinks3565.506.5%81.727.43.6%2.1%176%

Royal Mail Group is the worst performer in the FTSE 100 today, after its share price slumped 12.4%. Meanwhile, Unilever shares are down 4.5% today, while Diageo stock is -5.3% and Tesco shares have lost 0.9% (having bounced back since this morning’s open).

To sum up, I’d buy all four of these FTSE 100 shares today, both for their dividend income and future earnings growth. Each is a market leader in its particular field, which may offer some security in these troubled times. Then again, all four face similar worries: inflation (rising consumer prices), slowing economic growth, recession risk, etc. Yet, despite these risks to these companies’ earnings and their share prices, I’d gladly buy all four stocks today!

Inflation Is Coming: 3 Shares To Try And Hedge Against Rising Prices

Make no mistake… inflation is coming.

Some people are running scared, but there’s one thing we believe we should avoid doing at all costs when inflation hits… and that’s doing nothing.

Money that just sits in the bank can often lose value each and every year. But to savvy savers and investors, where to consider putting their money is the million-dollar question.

That’s why we’ve put together a brand-new special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation…

…because no matter what the economy is doing, a savvy investor will want their money working for them, inflation or not!

Best of all, we’re giving this report away completely FREE today!

Simply click here, enter your email address, and we’ll send it to you right away.

Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Diageo, Tesco, and Unilever. 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.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

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