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FTSE 100: these 5 shares have crashed since Christmas! Which do I like today?

Cliff D'Arcy
·4-min read
Tired or stressed businessman sitting on the walkway in panic digital stock market crash financial background
Tired or stressed businessman sitting on the walkway in panic digital stock market crash financial background

The FTSE 100 index has risen modestly since Christmas, but it’s not been plain sailing. On Christmas Eve of 2020 — a terrifically troubled year — the Footsie closed at 6,502.10 points. By last Friday, the index had gained almost 240 points since 24 December to hit 6,740.59. Yet this is almost 2% below this calendar year’s closing high of 6,873.30 on 8 January. In 2021, the emergence of Covid-19 variants and rising infections have taken some wind out of the stock market’s sails.

FTSE 100 winners since Christmas

Since 24 December, the Footsie is ahead by almost 3.7% — a respectable start to the year. However, as you’d expect, not all FTSE 100 members have risen in step. Some shares have done exceptionally well, while others have badly lagged behind.

For the record, 71 of the 101 stocks included in the FTSE 100 have gained in value since Christmas. The biggest gain is a tidy 37.6%, while the smallest gain is a tiny 0.4%. The average gain across these 71 gainers is 10.3%. That’s close to three times the growth of the wider index. These gainers include 11 stocks that have climbed by more than a fifth (20%), with five of these winners leaping by more than a quarter (25%). Nice.

The Footsie’s biggest losers since 24 December

At the other end of the scale lie 30 FTSE 100 fallers. Declines among these 30 losers range from under 0.1% to a hefty 20.4%. The average loss for these 30 laggards is 6.9%. That’s 10.6 percentage points behind the index’s return of 3.7%. Ouch.

Right at the bottom of the performance table lie five FTSE 100 shares that have dived over the past three months. Here they are: the five Footsie stocks that would have made the worst Xmas presents for UK investors.

Smith & Nephew (Medical appliances) -12.7%
Polymetal International (Precious metals mining) -15.8%
Just Eat (Food delivery) -17.4%
Fresnillo (Precious metals mining) -19.7%
London Stock Exchange Group (Stock exchange & financial data) -20.4%

Which faller would I back today?

Several of these losers (and JET in particular) might appeal to growth investors keen to profit from any post-Covid-19 rebound. With suppressed consumer demand waiting to be unleashed, the global economy might bounce back hard over the coming 12 months. Any strong surge in spending and growth would be great news for growth-oriented stocks.

Often, a company’s share price will become disconnected from its future prospects. Thus, as a veteran value investor, I’m always on the lookout for ‘fallen angels‘ within the FTSE 100. These are good companies whose share prices have been hit hard, but the underlying businesses remain in good shape. However, I’m definitely not looking for ‘cigarette butts’ — burnt-out businesses whose best days are behind them. I want to buy into good businesses at fair prices, as billionaire investor Warren Buffett recommends.

Hence, for me today, my pick of these five fallers would be Smith & Nephew (LSE: SN). This British multinational makes medical and surgical devices used right around the globe. S&N has a great pedigree: it has been trading continuously since 1856 (when Queen Victoria had reigned for less than two decades). In certain fields, such as endoscopies, orthopaedics, and wound management, S&N is a respected world leader. At its 2020 closing peak on 4 June, the Smith & Nephew share price closed at 1,742.5p. On Friday, it finished at 1,355.5p, down almost £4 for a discount of almost a quarter (22.2%) from the peak. I like the look of this discount, so I’ve added this FTSE 100 stock to my watchlist.

The post FTSE 100: these 5 shares have crashed since Christmas! Which do I like today? appeared first on The Motley Fool UK.

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Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo and Just Eat N.V. 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.

Motley Fool UK 2021