It’s been a good 2021 for the FTSE 100 index. As I write, the Footsie hovers around 7,108.34 points, gaining more than 640 points in 2021. The index has risen almost a tenth (9.9%) since the end of 2020. However, returns have varied widely over the past six months among the index’s members.
FTSE 100: winners and losers over six months
Of 101 FTSE 100 shares (one stock is dual-listed), 82 are up over the past six months. This shows the breadth of the market recovery since winter’s lows. Among these 82 winners, gains range from 78.1% to a tiny 0.1% (just the sort of widely dispersed results I’d expect to see). The average uplift among these gainers is 15.8% — almost six percentage points higher than the index return. This leaves us with 19 FTSE 100 losers, with losses ranging from 1.8% to an unpleasant 29.3%. The average loss among these decliners was 6.9% — almost 17 percentage points behind the Footsie’s near-10% gain.
The Footsie’s five stars
Here are the FTSE 100’s five best performers over the six months since 29 December 2020:
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| Royal Mail (Postal service) | +78.1% |
| Entain (Betting and gambling) | +59.4% |
| Ashtead Group (Equipment hire) | +57.0% |
| BT Group (Telecoms) | +53.0% |
| Kingfisher (Retailer) | +37.0% |
Gains among these champion shares range from 78.1% at the Royal Mail to 37% at DIY retailer Kingfisher. Among these five FTSE 100 winners, one share in particular stands out for me. That company is BT Group (LSE: BT.A), whose shares I’ve watched closely in 2021.
BT booms in 2021
I’ve written about BT often since February, when I decided that this FTSE 100 share was undervalued. On 9 February, the BT share price dropped to its 2021 intra-day low of 120.45p, before closing at 122.15p (its 2021 closing low). As I write, the shares trade at 200.6p. That’s a gain of over 80p from the 2021 low point, for an uplift of almost exactly two-thirds (66.5%).
More recently, I have continued to argue that BT shares are underrated. On 13 May, I said that “I would buy BT shares at their current levels” with the share price at 160p. Since then, this FTSE 100 stock has leapt by more than a quarter (25.4%). That’s a great gain in one-and-half months. Also, here’s BT price performance over timescales ranging from one month to five years:
| 1M | +15.9% |
| 3M | +40.5% |
| 6M | +53.0% |
| 1Y | +73.6% |
| 2Y | +3.9% |
| 3Y | -5.8% |
| 5Y | -53.6% |
In the short-term, BT shares have been a cherry, rising strongly over four periods up to one year. But they’ve also been a long-term lemon, down nearly 6% over three years and collapsing by more than half (53.6%) over five years. Furthermore, this FTSE 100 stock is £3 lower today than the £5 heights hit in November 2015.
What do I like about BT today? First, the company has restored its cash dividend. The initial yearly payment of 7.7p a share works out at a dividend yield of 3.8%, slightly higher than the FTSE 100’s yield. Second, BT’s contributions to its huge pension deficit are set to fall by £300m a year from mid-2024. Third, Ofcom’s Wholesale Fixed Telecoms Market Review was regarded as being favourable to BT. What don’t I like? Well, BT had a pretty gruesome record of corporate governance and performance in recent years, including an accounting fraud in Italy. Also, it has to spend many billions upgrading the UK’s broadband network. Although I don’t own this FTSE 100 stock today, I would be happy to buy and hold at the current BT share price.
