On Friday, I mentioned that the FTSE 100 is almost a fifth lower over the past six months (down 1,425 points, or 19.2%). Interestingly, the UK’s main market index has slipped by a similar percentage (18.9%) over the past 12 months (it was roughly at the same level earlier this year as it had been last summer). As a value investor, this coincidence sent me sifting through the FTSE 100 to find its worst performers over one year.
37 FTSE 100 shares have risen
As I’ve explained before, the Footsie tracks the overall performance of its 101 member shares (yes, 101 members, as Shell lists both RDSA and RDSB shares). So it’s merely an average. Only by digging deeper do some interesting trends emerge.
For example, though the FTSE 100 has dived over 12 months, no fewer than 37 shares have climbed over the past year. Of these 37 risers, five recorded share-price gains of between 60.4% and 79.9%. A further six shares are up from 22.8% to 52.3%. Given the Covid-19 crisis, these are very impressive capital gains indeed.
Another 25 shares have beaten the index
As two shares were not in the FTSE 100 a year ago, this leaves 62 shares to have lost ground over the past year. Of these 62 fallers, 25 have actually beaten the wider index, having dropped only between 1.5% and 18.7% in 12 months.
37 shares have underperformed the FTSE 100
This leaves 37 shares that have fallen more than the 18.9% drop recorded by the wider index. Of these, 12 are down between 19.5% and 29%. Another nine have slumped between 31.9% and 38.1%.
The FTSE 100’s dirty dozen
The remaining 16 shares have crashed from 40.2% to 69.3%, with the ‘dirty dozen’ – the 12 biggest FTSE 100 fallers over the past year – shown below.
BP -43.1%
HSBC Holdings -44.4%
ITV -45.8%
Melrose Industries -46.8%
Lloyds Banking Group -47.9%
NatWest Group -49.6%
Royal Dutch Shell A -51.1%
Royal Dutch Shell B -53.1%
Evraz -53.3%
Informa -54.5%
International Consolidated Airlines Group -56.3%
Rolls Royce Holdings -69.3%
Somewhat unsurprisingly, my ‘dirty dozen’ are very similar to the dogs of the FTSE 100 over the past six months. These ailing companies’ business models have been hit for six by the coronavirus, with many seeing record falls in revenues and earnings.
Rolls-Royce, British Airways owner IAG and Melrose have been clobbered by the collapse in air travel. Likewise, the three big banks (HSBC, Lloyds and NatWest) stand to lose tens of billions due to rising loan losses and defaults. Media companies Informa and ITV have similar issues – a lack of customers and/or advertising. Chelsea FC owner Roman Abramovich’s Evraz is also doing badly, thanks to falling demand for the miner’s raw materials.
This leaves three shares in two FTSE 100 companies: oil supermajors Royal Dutch Shell and BP (LSE: BP). I’d happily buy shares in either or both right now, but BP’s ongoing share-price weakness might make it a better bargain.
BP is my ‘best pick’
Right now, one BP share costs 298.1p, down 43.1% in 12 months. That’s a lower price than during the worst of the 2000/03 dotcom crash and the 2007/09 global financial crisis. In fact, it’s among the lowest prices BP shares have traded at since 1996.
For the record, BP shares have been as high as 556.2p over the past 12 months – almost double their current level. At the other end of the scale, BP’s share price collapsed to a mere 222.9p on 19 March, crashed by coronavirus and an accompanying oil-price slump.
But BP is a £60.2bn FTSE 100 giant that paid cash dividends totalling 32.67p over the past four quarters. At today’s price, that’s a dividend yield of 10.96%. Sure, BP may suspend or slash its quarterly dividends, but they will eventually return. Honestly, I dream of banking a return of anywhere near 11% a year, in cash, for a lifetime. That’s why I’d buy BP shares today.
