The stock market has been moving around a lot lately. Even some blue-chip FTSE 100 shares have seen big swings in their prices.
As a long-term investor, I think that presents opportunities for me. If a quality business that I think has good future prospects is available at an attractive price, I can take advantage of that price to tuck it into my portfolio. That is why in recent days I have increased my position in one FTSE 100 share and started a position in another one.
JD Sports
I already held shares in retailer JD Sports (LSE: JD) and am upbeat about its prospects. The company has a proven retail formula and its international footprint gives it an impressive platform for growth.
But not all investors seem to share my view. This FTSE 100 share has lost 49% of its value in the past 12 months.
The share price nearly halving suggests the company’s prospects may be far less attractive than I reckon they are. I do see risks. For example, cost inflation could eat into profit margins. Tightening consumer spending might see shoppers less willing to splash out on fancy trainers. The company has also had a leadership change this year, which may mean it struggles to maintain its impressive growth rate of the past few years.
However, I am upbeat. The new leadership is experienced and could do well helping JD as it grows in size. A lot of its customers are young and will still find money to spend on clothes and shoes even when budgets are tight. The company’s interim results came in at the top end of its board’s expectations. And JD expects headline profit before tax and exceptional items for the year to match last year’s record performance.
Legal & General
I also took advantage of share price weakness to add the financial services company Legal & General (LSE: LGEN) back into my portfolio. These FTSE 100 shares are trading at a 20% discount to their price 12 months ago.
Again, there are risks that I think can help explain some of the bearishness towards the shares. A worsening economy could lead to people investing less. That might be bad for the company’s revenues and profits. Recent turbulence in the pensions market has highlighted the risk of some providers needing to unload assets at low prices, although Legal & General said this week that it has not been forced to do that.
The long-term story here remains strong, in my view. I expect robust demand for services such as insurance in coming decades. With a well-recognised brand and large customer base, Legal & General is poised to benefit from that. I also find its 8.2% dividend yield attractive.
Quality FTSE 100 shares on sale
Both JD Sports and Legal & General may face challenges ahead. But both are well-established businesses with proven models and a track record of profitability.
I see recent share price weakness as a buying opportunity. So I have purchased shares in both companies this week.
