The past year has been pretty good to the FTSE 100 index. As I write, the Footsie stands at 7,066.36 points, up more than 1,040 points — more than a sixth (17.3%) — over 12 months. Alas, not all the index’s constituents have enjoyed this latest leg of the bull (rising) market. Indeed, some stocks have performed poorly since mid-September 2020. Here’s one loser that I don’t own, but would buy and hold today.
The FTSE 100 rebounds
On ‘Meltdown Monday’ (23 March 2020), the FTSE 100 slumped to a closing low of 4,993.89 points. after hitting rock-bottom, the index bounced back strongly to end 2020 at 6460.52 points. It has since added more than 605 points — up almost a tenth (9.4%) — in 2021. But not all Footsie shares have benefited from this rising tide.
Of the 101 stocks (one is dual-listed) in the FTSE 100, 86 have gained in value over the past 12 months. The highest increase was 122.3% and the lowest a mere 0.9%. The average gain across all 86 winners was more than a third (34.7%), double the wider index’s rise. This leaves 15 shares that have declined in value since 14 September 2020. These losses range from 1.9% to 37.3%. The average loss across all 15 losers was around a seventh (-14.6%).
The Footsie’s five biggest flops
For the record, these are the FTSE 100’s five biggest fallers over the past 12 months (sorted from smallest to greatest loss):
|Ocado Group||online supermarket||-17.7%|
|Just Eat Takeaway.com||0nline takeaways||-18.9%|
As you can see, losses among the FTSE 100’s five biggest flops range from more than a sixth (-17.7%) to almost two-fifths (-37.3%) over 12 months. Two of these stocks (Ocado Group and Just Eat Takeaway) are go-go growth stocks that have come off the boil in 2021. Two other shares (Polymetal International and Fresnillo) are mining stocks, which are notoriously volatile (especially when metals prices fall steeply). Right now, I’ve no interest in buying any of these four stocks, largely because I’m a boring value investor.
I think Reckitt might be a steal
Of these five FTSE 100 flops, I think that Reckitt (LSE: RKT) might fit my bill as a value share to buy and tuck away. From 2009, the company was known as Reckitt Benckiser, but it rebranded back to Reckitt in March of this year. This FMCG (fast-moving consumer goods) firm has origins dating back 207 years to 1814. The group sells hygiene, health, and nutrition brands, including Calgon dishwasher tablets, Clearasil spot cream, Cillit Bang cleanser, Dettol and Lysol disinfectants, Durex condoms, Nurofen painkillers, etc.
However, shares in this Slough-based business have struggled since they hit a 52-week high of 7,774p on 5 October 2020. As I write, Reckitt shares trade at 5,750p, down over £20 — more than a quarter (-26.0%) — from their October 2020 high. At this price, the group’s market value is £40.6bn, making it a FTSE 100 heavyweight. Demand for Reckitt’s cleansing products surged during the worst of the Covid-19 pandemic, but sales growth has since slipped back. Also, Reckitt’s operating margins are under pressure due to rising input costs in 2021.
Despite Reckitt’s considerably higher revenues, its shares are cheaper today than at any point during pre-pandemic 2019. For me, this indicates that this stock might have been unfairly dumped into the FTSE 100’s bargain bin. The shares are down almost a quarter (-23.9%) over the past 12 months and now offer a dividend yield slightly above 3%. Hence, Reckitt looks like a steal to me right now!
Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo, Just Eat Takeaway.com N.V., and Ocado Group. 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.