It has been a rocky time lately in the stock markets. The benchmark FTSE 100 index of leading companies is less than 3% above its low point of the last 12 months. It has fallen 4% in the past year.
With the economy in bad shape and inflation raging, I would not be surprised if we see continued turbulence in the index. But turbulence can be a long-term investor’s friend. That is because it sometimes makes it cheaper to buy into companies with promising future prospects.
Here are three such FTSE 100 shares I would snap up for my portfolio today if I had spare funds to invest.
JD Sports
The sportswear retailer JD Sports (LSE: JD) is well-known thanks to its branches across the country – and indeed around the world.
But the most athletic thing about the JD Sports share price in the past year has been its downward movement. It has more than halved in the past 12 months.
Is that because of disappointing business performance?
I do not think so. The FTSE 100 company expects its headline profit before tax and exceptional items this year to be in line with last year, which was a record. Admittedly simply more of the same might seem like a letdown after years of growth. But this is in an environment where the firm faces risks from rampant inflation hurting profit margins and slowing consumer spending eating into sales.
The firm benefits from a proven business model, large customer base, and high brand awareness among its target audience. I think that gives it a long-term competitive advantage and I have been buying the beaten-up shares for my portfolio this year.
Legal & General
Financial services firm Legal & General (LSE: LGEN) has also seen its shares fall in the past year, by 19%.
A challenging economy could be bad news for profits at the company if investors start to pull out funds. But I see an upbeat long-term investment case here. Financial services is an area I expect to keep seeing strong customer demand. Legal & General has a long-established brand that helps it to capitalise on that. It also has a sizeable customer base.
The company has a progressive dividend policy, meaning it aims to grow its annual payout. That is never guaranteed but Legal & General has an impressive track record of dividend increases and currently yields a juicy 8.2%.
Smith & Nephew
Yet another FTSE 100 faller in the past year is medical devices manufacturer Smith & Nephew (LSE: SN). its shares are down 21% in 12 months.
But the company has a growth strategy that will hopefully see it increase both sales and profits in coming years. I like the company’s position within medical devices, an industry I expect to continue to benefit from rising demand thanks to aging, growing populations in many countries.
The pandemic showed one risk to the company, which is any slowdown in elective procedures hurting demand for its products. But with a backlog of operations outstanding, I expect positive business momentum for Smith & Nephew. I think it could be an attractive addition to my portfolio if I had the cash to invest.
