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Two FTSE 100 stocks up more than 1,000% in a decade!

Kirsteen Mackay
Champagne poured into a row of flutes

The London Stock Exchange Group (LSE:LSE) share price has risen spectacularly in 2019 from an opening price of £40.40 on January 1 to £77.38 at the time of writing. That’s an increase of 74% year to date.

This is mainly due to its £22bn bid to acquire data goliath Refinitiv, in a move that could see it rival Bloomberg. Refinitiv is a global provider of financial markets data and infrastructure and is owned jointly by Blackstone and Thomson Reuters. Given the increasing value in data, this news caused the London Stock Exchange share price to spike 15% in response.  

In September the London Stock Exchange share price rose again after the Hong Kong Stock Exchange submitted a takeover bid of £32bn. This was not a significant enough sum to tempt LSE and the bid was rejected.

The exchange is more than 300 years old and its share price has increased by more than 1,000% in the past decade.

Today it has a price-to-earnings ratio (P/E) of 55, which is very high. Its dividend yield is less than 1% and earnings per share are £1.38. Going by this P/E and paltry dividend, I think LSE is overpriced and, although I’m confident that it will continue to do well in 2020, I’d avoid buying the shares at these prices.

Over 3,000% share price rise!

Another star of the FTSE 100 is JD Sports Fashion (LSE:JD), which has seen a significant share price rise of more than 137% year to date. If you’d invested £1,000 in shares of JD a decade ago in December 2009 when they were selling for approximately 25p, then today they would have gained over 3,000% in value and your £1k would now be worth over £33k!

JD Sports has been listed on the London Stock Exchange since 1996, but it wasn’t until 2013 that its share price really began to gain traction. Back then it had 900 stores in the UK and across Europe, whereas today it operates 696 stores worldwide.

Concern arose for the stock earlier in December when its largest investor, Pentland Group, sold 2.5% of its shares; it still has a 55% stake in the group, which is reassuring. In a year when the British high street was filled with doom and gloom and Brexit cast its dark shadow, JD continued to flourish and make sales.

It sells a variety of popular sports brands and has growth opportunity stateside since completing its takeover of US trainer chain Finish Line. 

JD’s P/E is 30 and its dividend yield is only 0.2% with 15 times cover. Earnings per share are 27p and its debt ratio is low at 17%. I think JD Sports still has a lot to offer, but its share price is quite high, so I think it has already priced the value in. Until Brexit is concluded there is still worry ahead for UK retailers, although JD has an advantage with its foreign presence. If you already own shares in JD Sports I think you’d be wise to hold. 

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Kirsteen has no position in any of the shares mentioned. 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.

Motley Fool UK 2019