Down 15% in a month! Are these 2 unloved blue-chips the best shares to buy now?

Harvey Jones loves buying bargain stocks and wonders if two of the worst FTSE 100 performers are the best shares to buy today.

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I sometimes think that the best FTSE 100 shares to buy are the ones that have performed the worst. That allows me to buy them at a lower valuation and typically grab a higher yield, too. This requires patience, though. Companies can take a long time to find their way again. The following two are down 15% in the last month. Is this my moment?

The first is Glencore (LSE: GLEN). I bought the mining giant twice last year, in July and September, at an average entry price of 458.33p. At today’s 410.3p, I’m down 10.48%. Bah.

FTSE 100 recovery stocks

Over one year, the Glencore share price is down 9.95%. However, it’s up 75.02% over five years, which shows it can do well when conditions are right. Unfortunately, all isn’t right with the world today.

Should you invest £1,000 in Glencore Plc right now?

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Created with Highcharts 11.4.3Glencore Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

The mining sector has been hit hard by the slowdown in China, the world’s biggest consumer of metals and minerals. Fears of a US recession have also hammered sentiment.

Glencore’s full-year 2023 revenues plunged 15% to £217.73bn, while earnings per share crashed 74% to $0.34. I bought Glencore as much for income as growth, but there’s bad news on this score, too. The board slashed the dividend from $0.44 per share in 2022 to just $0.13 in 2023. The trailing yield is now just 2.49%. It was 6% when I bought it. Bah again.

Glencore dividends tend to bounce around a little. The board had just spent $6.93bn buying a 77% stake in steelmaking coal business Elk Valley Resources, giving it less room for largesse. The dividend per share is expected to edge up to 15.5 cents in 2024 and 20.9 cents for 2025, but it’s not the big yielder of yore.

Potentially good value

Glencore shares look decent value today trading at 11.74 times earnings. We need some positive economic news, but uncertainty is now the order of the day. This isn’t the most riveting share to buy in today’s climate, I’m afraid, but I certainly won’t sell.

Aerospace group Melrose Industries (LSE: MRO) hasn’t been flying lately either. The stock is down 8.58% over one year and 6.88% over five years. Yet despite that, it’s expensive trading at 24.91 times earnings. And yields a meagre 1.09%. No wonder it’s flown well under my radar.

Created with Highcharts 11.4.3Melrose Industries Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

On 1 August, the board unveiled what it thought was a strong set of results, with first-half revenues up 12% to £1.74bn. It hiked the dividend 33% to 2p per share and announced a £250m share buyback. All that didn’t stop the share price falling 8.5% in early trading.

Melrose said it was on track to meet 2024 guidance but reduced its 2025 revenue target from £4bn to £3.8bn, blaming supply chain issues and recent disposals. Investors looked into the company’s future, and didn’t like it.

As a private investor, I can afford to take a longer-term view. I don’t have anyone to answer to but myself. If Melrose was cheaper, I’d be tempted to buy it. But I can seen better value recovery opportunities on the FTSE 100 and I’ll buy those first.

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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 Glencore Plc. The Motley Fool UK has no position in any of the shares mentioned. 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.

Pound coins for sale — 51 pence?

This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

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