Several times a week, I trawl through the FTSE 100 index, looking for undervalued and high-yielding shares. During this exercise, I hope to find ‘fallen angels’ — quality companies whose share prices have taken a beating for various reasons.
The FTSE 100’s winners and losers
To my surprise, the FTSE 100 has actually risen by 0.6% over the past 12 months. Add in, say, 3.5% for cash dividends and this takes the index’s return to around 4.1% for one year. Yet this modest positive return makes the Footsie one of the best-performing major stock indexes in the world over this period.
Of course, not all FTSE 100 stocks have done well. Of 98 shares that have been in the index for at least a year, only 24 have risen over 12 months. These gains range from a high of 59.7% to a low of 0.1%, with the average positive return being 21.4%.
This leaves 74 stocks that have declined in value over 12 months. These losses range from just 0.3% to a whopping 63.4%, with the average decline being 23.8%.
The Footsie’s three biggest flops
For the record, these are the FTSE 100’s three worst performers over the past 12 months:
| Company | Sector | Market value | 12-month loss |
| Persimmon | Housebuilder | £4.2bn | -51.4% |
| JD Sports Fashion | Retailer | £5.3bn | -54.5% |
| Ocado Group | Retailer | £5.2bn | -63.4% |
As my table shows, all these FTSE 100 ‘dogs’ have crashed, losing more than half their value over the past year. The worst performer is technology-driven online retailer Ocado Group, whose stock has crashed by almost two-thirds in 12 months. Ouch.
Runner up for FTSE 100 dog of the year is JD Sports Fashion, a leading retailer of sports, fashion, and outdoor wear. But even after its 2021-22 collapse, this share is still up 46.3% over the past five years.
We own one of these FTSE 100 failures
As it happens, my family actually owns the third of these three Footsie failures. In late July, my wife bought shares in housebuilder Persimmon (LSE: PSN) for our family portfolio. We did this after previous steep falls in the housebuilder’s stock, buying shares at an all-in price of £18.56.
Unfortunately, our timing proved to be terrible, as this FTSE 100 share has continued to crumble. As I write on Friday afternoon, it trades at 1,316.5p, down almost three-tenths (-29.1%) since we bought in. That said, I have high hopes for a future recovery for Persimmon shares. At the current share price, they trade on a lowly price-to-earnings ratio of 5.7, which equates to an earnings yield of 17.5%.
What’s more, Persimmon stock currently offers the highest dividend yield in the entire FTSE 100. However, this cash yield of 17.9% a year is covered only 0.98 times by earnings. In other words, it looks likely to me that this payment will be cut in 2023 — especially if a housing crash develops.
Indeed, I suspect housebuilders will have a tough time in the next 12-18 months. After all, a toxic combination of soaring inflation, sky-high energy and fuel bills, and rising interest rates are crushing consumer confidence. Even so, we have no plans to sell this FTSE 100 stock and if it does fall further, we may even buy more shares for the long term!
