These 3 big-name FTSE 100 shares are stinking out my portfolio. Time to sell?

Harvey Jones is reviewing three FTSE 100 shares trailing the rest of his portfolio and asks, do they still deserve their place?

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I’ve spent the last year snapping up FTSE 100 shares after they were hit by bad news and, so far, I’ve done pretty well. However, not every one’s been a winner. Three have fallen further since I added them to my portfolio. Do I still believe in them?

I bought Diageo (LSE: DGE) in November after it issued a profit warning following a sharp sales dip in its Latin American and Caribbean market.

The global spirits giant has been pursuing a premium brand drinks policy but many cash-strapped customers are trading down to cheaper rivals.

Buying cheap stocks

I thought I was getting in at the bottom but Diageo shares have fallen another 10.58% since I bought them. Over one year, they’re down 23.47%.

Diageo looks good value by its recent standards, trading at just 15.38 times earnings and yielding 3.18%. Yet, so far, I’ve resisted the temptation to average down. I’m slightly worried by Gen Zs (isn’t everyone of my age?) A quarter of them have given up boozing. If this marks a generational shift, Diageo could take a long-term hit.

I bought JD Sports Fashion (LSE: JD) in January after a profit warning wiped £1.8bn off its value in a day. I’d been wanting to buy this pacy growth stock for years, and it looked like I could finally buy at a cut-price valuation.

but mild weather and heavy discounting hit pre-Christmas sales at the group, which is best known for shifting trainers and sportswear, but also owns Go Outdoors, Blacks and Millets.

The big attraction is that JD has lucrative deals with global brands Adidas and Nike, but the latter’s going through a tough time all of its own.

Blue-chip recovery play

At first, the JD Sports share price looked like making a lightning recovery. But it’s slipped, again, so I’m down a modest 2.62%. Over one year, it’s down 20.99%.

JD sports now looks dirt cheap, trading at 9.18 times earnings. If the economy recovers, I’d expected the shares to pick up sharpish. A strong balance sheet and ample cash generation both help. Let’s hope Gen Z doesn’t stop buying trainers too.

I bought pharmaceutical giant GSK (LSE: GSK) in March and this time I did average down, buying more shares in June. The trigger was a sharp drop in the share price due to Zantac-related litigation in the US. So far, I’m down 9.82% overall. Over 12 months, the stock’s up 14.31%.

Trading at just 9.7 times earnings, GSK looks super-cheap. If litigation fears have been overdone, it could bounce back in style. The yield’s a solid but unspectacular 3.86%. I’m betting that GSK will eventually make up lost ground on rival AstraZeneca, which is far pricer, trading at more than 40 times earnings. It’s proving a slow, slow process. But then, so is building long-term wealth from shares. I might even buy more GSK shares.

I buy stocks with a minimum five-year view, so I’ll hold onto all three. I’m betting they’ll come good, Gen Z not withstanding.

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 assessed. Consider taking independent financial advice.

Harvey Jones has positions in Diageo Plc, GSK, and JD Sports Fashion. The Motley Fool UK has recommended AstraZeneca Plc, Diageo Plc, and GSK. 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.

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