What happened to last year’s dogs of the FTSE 100?

The worst performers of the FTSE 100 last year have seen mixed fortunes so far in 2024. So would I invest in one that plummeted in 2023?

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Each year in the stock market, some blue-chip shares inevitably do better than others. And the very worst performers in the flagship FTSE 100 index in a given year are known as the dogs of the index.

Research has suggested that investing in the ‘dogs of the Dow‘ (the Dow Jones Industrial Average is the US equivalent of the FTSE 100 index) can be a rewarding strategy.

The theory is that these are large, established companies and often the price fall on bad news can understate that. On the other hand, it is rare for a share to perform worse than almost its entire peer group for no reason.

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So how are last year’s three biggest dogs of the FTSE 100 performing so far in 2024?

Anglo American: up 4% in 2024

Mining giant Anglo American fell around 40% last year, worse than any other FTSE 100 share.

So far this year though, it has shown signs of turning things around. The share price has risen 4% since the turn of the year – a modest rise, but certainly far better than it managed in 2023.

Created with Highcharts 11.4.3Anglo American Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

While iron ore prices and sales fell in the first half compared to the same period last year, the company has benefitted from higher copper prices.

St James’s Place: 9% higher so far this year

Investment management firm St James’s Place (LSE: STJ) saw its own share price collapse last year, logging a 38% fall. But 2024 has been less alarming for the firm’s investors and the shares have moved up 9%.

Fresnillo: further 8% fall since January

Miner Fresnillo fell 34% last year, following the value of its core product: silver. It has continued to slide in 2024, falling 8% so far.

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

Revenues grew in the first half of the year compared to the same period last year, thanks mainly to higher gold and silver prices. Profits were up too.

The ongoing share price weakness partly reflects market nervousness about whether recent record high gold prices are here for a while, or just a flash in the pan.

Investing on strength – or weakness?

That trio of FTSE 100 dogs then, has put in a fairly underwhelming performance so far in 2024. Only St James’s Place has managed to beat the average FTSE 100 share price gain so far this year of 6%.

But that partly reflects just how far it had fallen beforehand. While the FTSE is up 12% over the past five years, the St James’s Place share price has tumbled 31%.

Created with Highcharts 11.4.3St. James's Place Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

While it has performed better so far this year, I would have been nervous about investing in it at the end of last year (and did not). It felt like a turnaround situation due to upset customers, complaints of customer overcharging and a competitive positioning that makes it look ripe for cheaper competitors to try and attract clients.

In the first half, positive news included net inflows of cash. Assets under management hit a record.

I still see weakness in St James’s business model though, so have no plans to invest.

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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.

C Ruane has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo Plc. 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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