Three Fools feel like they’ve potentially made a bad investment in the stock market over the last 12 months — read on to find out their FTSE failures…
What it does: boohoo owns a number of well-known fashion brands including Warehouse, Oasis, Debenhams and PrettyLittleThing.
By Andrew Mackie. Since buying shares in FTSE AIM stock boohoo (LSE: BOO) at the end of last year, I have seen their value collapse by 80% (at the time of writing). It is now the worst performing stock in my ISA portfolio.
When I made the investment, I did so with full awareness of the mass of issues it was facing. However, I believed most of them were temporary and would eventually be overcome. How wrong I was.
Supply chain issues over the past couple of years have had a direct impact on its unique selling point, namely the breakneck speed of getting its new designs to market.
Although this problem has been receding recently, continued stubbornly high inflation has altered consumer spending patterns. As a result, it finds itself between a rock and a hard place. If it raises prices too aggressively, cash-strapped millennials and Gen Z, which represents its core buyer, will look elsewhere.
Despite the fast fashion industry coming under closer public scrutiny, I do not see the threat as existential. Many agree with me. Mike Ashley, the owner of Frasers Group, recently bought a 5% stake in the company.
Through its large social media presence, it has demonstrated its ability to lead the fashion ecommerce market. It also continues to invest heavily in expanding its distribution centre capacity both in the UK and US.
All in all, I am not willing to throw the towel in on boohoo just yet.
Andrew Mackie owns shares in boohoo.
What it does: Braemar offers advisory services in shipbroking, chartering and risk management.
By Harshil Patel. I bought shares in Braemar (LSE:BMS) last year after it delivered a jump in annual profits. At the time, sales had jumped by 21% and pre-tax profits soared by 66% from the previous year.
The FTSE stock expressed favourable market conditions as the reason for its strong results. The outlook was also encouraging, where limited capacity at many shipyards had created an opportunity for the business.
A few months later, Braemar reported further encouraging progress. It also doubled its interim dividend and expressed a positive outlook looking ahead.
Despite these positive updates, Braemar’s share price failed to move higher. After several months, my stop-loss was hit, and I sold the shares at a loss.
Just a few days later, Braemar’s stock fell a further 20% after it delayed publishing its full-year report and requested that its shares be suspended due to an investigation.
So, yes, I regret buying Braemar shares, but I certainly don’t regret selling them when I did.
Harshil Patel does not own shares in Braemar.
What it does: Lloyds Bank is a British retail and commercial bank with branches across England and Wales.
By John Fieldsend. The FTSE 100 stock I most regret buying this year is Lloyds Bank (LSE: LLOY). I opened a position a few months back at an average cost price of 49p. The share price is now 42p. I’m looking at a paper loss of 14%.
At the time, it looked like a no-brainer buy. Interest rates were going to increase revenues and the dividends looked better than they had for years. A £200m share buyback was the icing on the cake. It seemed like a stock with very little downside.
I don’t think much has changed, so I’m hoping things will turn around soon. Although with Lloyds being the country’s biggest mortgage lender and interest rates set to stay high, I won’t be holding my breath.
That said, it’s not all bad. I have a forward dividend yield of over 6% to look forward to and forecasts are set to keep rising. Such is the advantage of investing in dividend stocks.
John Fieldsend owns shares in Lloyds.