Volatility continues to plague the financial markets, and even some of the largest FTSE 100 stocks have felt the ground shake. The index as a whole managed to fare better than its US counterparts, like the S&P 500 and Nasdaq 100 in 2022. But in the latter stages of the first quarter of 2023, it’s lagging behind, falling by nearly 2% since the start of the year.
Let’s look at the Footsie’s best and worst performers over the last three months.
The laggards
Despite banks being battered in recent weeks, none appear in the top five losers of the FTSE 100 so far this year (Although Barclays is number six). Instead, it seems the mining industry is starting to see its cycle turn.
| FTSE 100 Stock | Industry | 2023 Q1 Performance | 12-Month Performance |
|---|---|---|---|
| Ocado Group | Consumer Staples | -29.9% | -60.0% |
| Anglo American | Mining | -21.9% | -34.7% |
| Glencore | Mining | -20.7% | -11.8% |
| Beazley | Insurance | -16.8% | +34.3% |
| Fresnillo | Mining | -16.0% | +1.2% |
Commodities typically outperform during periods of inflation. But it seems this upward force isn’t enough to offset the rapid decline in metal prices now that Covid supply chain disruptions are almost resolved. Mining stocks enjoyed some significant tailwinds in the months following the pandemic. But as cyclical industries do, prices have begun to wind down, taking out dividends in the process.
What about Ocado? Most consumer staples businesses have been chugging along nicely. But the firm’s heavy investment in warehouse automation is taking its toll. The company appears to be making solid operational progress. Unfortunately, its losses are also ballooning from £176.9m in 2021 to £500.8m in 2022.
In the case of Beazley, the insurance business as a whole continues to thrive. But what seems to have spooked investors is the losses incurred in its investment portfolio. Despite outperforming most stock market indices last year, its latest results showed a 2.1% decline in its asset portfolio. That may not seem like much. But it translates into a £179.7m loss that slashed pre-tax profits by 50%.
Winning FTSE 100 stocks
While the UK’s flagship index may be underperforming, quite a few of its constituents are showing the world how it’s done.
| FTSE 100 Stock | Industry | 2023 Q1 Performance | 12-Month Performance |
|---|---|---|---|
| Rolls-Royce | Industrials | +56.6% | +46.4% |
| JD Sports Fashion | Consumer Discretionary | +37.1% | +11.2% |
| BT Group | Telecommunications | +22.6% | -25.5% |
| Flutter Entertainment | Consumer Discretionary | +21.5% | +60.0% |
| Associated British Foods | Consumer Staples | +20.9% | +14.8% |
After being decimated in the pandemic, Rolls-Royce is back with a vengeance and new leadership. The continued recovery of the airline industry has caused demand for the firm’s engine maintenance services to lift off. And while plenty of challenges remain ahead, a £2bn improvement in free cash flow is quite a feat.
Meanwhile, JD Sports seems to have investor favour right now. The firm is navigating a less-than-optimal business environment. Yet management recently unveiled a new strategy to return to double-digit growth and margins over the next five years. As for Flutter Entertainment, the company is making solid strides in expanding to the US, helping revenues climb by 27% and losses drop by 26%.
Lastly, Associated British Foods is benefiting from inflation (as the price for ingredients like sugar continues to climb), and a strong performance at Primark. And BT’s rollout of 5G and fibre-to-the-premises is giving investors confidence for the long run, especially now that the group is on track to deliver £3bn in annual cost savings.
