The past 12 months have been positive for the FTSE 100, with the index gaining almost 4.3% Adding in cash dividends lifts this return above 8%. Meanwhile, the US S&P 500 index has dived by 10.5% over the same period.
The FTSE 100 dodges the crash
In late 2021, I repeatedly warned that global stock valuations were far too expensive. I warned of an ‘everything bubble’ that also included bonds, property and digital assets. Hence, when this bubble popped in early 2022, I wasn’t surprised.
At that time, I frequently argued that the Footsie was far too cheap, both historically and geographically. Indeed, the index proved to be among the least volatile during 2022’s market meltdown.
However, not all FTSE 100 shares did as well as the wider index in 2022-23. Of 98 stocks in the FTSE 100 for one year, only 45 have risen over 12 months. This leaves 53 losing stocks over this period. Of these fallers, these are the three biggest losers:
The dogs of the Footsie
| Company | Ocado Group | Persimmon | Segro |
| Sector | Retail/Tech | Housebuilding | Commercial property |
| Share price | 678.8p | 1,419p | 835.4p |
| 12-month change | -54.9% | -40.7% | -35.8% |
| Market value | £5.6bn | £4.5bn | £10.1bn |
As my table shows, all three stocks have lost considerable value over one year. These price declines range from over a third at Segro to more than half at Persimmon.
Two of these stocks have an obvious connection. Persimmon is a leading housebuilder, while Segro is a major owner of commercial property. With interest rates rising and the cost of living soaring, both property groups have taken a beating.
The third of these FTSE 100 losers has its own particular problems. Technology-driven online retailer Ocado‘s share price has crashed spectacularly since peaking during the pandemic. On 30 September 2020, the stock briefly touched 2,914p and has since crashed by more than three-quarters (76.7%).
Would I buy any of these losers today?
My wife already owns Persimmon shares in our family portfolio. Since we bought them six months ago, they’ve dived by 23.5%. For now, we have no plans to sell this losing stock, but we also have no plans to buy any more Persimmon shares. However, in the long term, I expect property stocks to be winners, thanks to the UK’s chronic housing shortage.
That leaves two Footsie fallers. I’ve been a fierce critic of Ocado, which has yet to make a decent profit in 21 years of trading. Also, this stock has never paid a dividend, so it’s really not for me as an income investor. Then again, the group keeps signing contracts with new retail partners, so it may yet be a winner.
Segro — formerly Slough Estates — is a Real Estate Investment Trust: a listed property fund. It develops and owns UK and European business parks. This market is struggling nowadays, as consumers rein in their spending and work more at home due to Covid-19. Still, Segro shares do look cheap on fundamentals and also offer a 3% yearly dividend. But I’ll leave them to less risk-averse investors.
Of course, I could well be wrong. Each of these bombed-out FTSE 100 stocks could rebound when the UK economy strengthens. But I’d rather not buy these three ‘falling knives’ right now!
