After steep falls, these FTSE 100 shares look dirt cheap to me

While the FTSE 100 has dropped 3.7% this month, these five Footsie flops have crashed as much as 23.5%. But which of these battered stocks would I buy now?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

With one day left, this March has been volatile for UK investors. Over the past month, the FTSE 100 index has lost 3.7% of its value — and that’s even with a near-4% rebound over the last two weeks.

Across the Atlantic, the S&P 500 index is actually up 1.9% over one month. Again, this follows a 5%+ recovery from March’s low. Hence, it’s fair to say that, after a positive start to 2022, volatility caught investors by surprise this month.

Down go FTSE 100 stocks

Over one month, 24 shares in the Footsie have risen in value. These increases range from 0.2% to 12.8%, with the average being 3.4%.

Should you invest £1,000 in Diageo right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Diageo made the list?

See the 6 stocks

This leaves 76 losers. Declines from these laggards range from 0.1% to 23.5%, with an average loss of 7.4%.

Of course, some FTSE 100 shares have fared far worse than others. Here are the five biggest flops over one month, based on Thursday’s closing prices:

CompanySectorOne-month % changeOne-year % changeFive-year % change
British LandProperty-16.2-31.2-42.0
BeazleyInsurance-16.4+32.3+1.1
BarclaysBanking-17.7-9.2-31.1
Standard CharteredBanking-23.4+17.6-15.6
Ocado GroupRetail/Tech-23.5-59.0-10.1

Price plunges across these five flops range from almost a sixth to nearly a quarter — all in the space of a single month. And while two of these shares have gained in value over the last 12 months, only one eked out a positive result over a half-decade. Ouch.

One thing that stands out is that four of these five fallers have been hit by severe shudders in the banking world. Following the collapse this month of three mid-sized US banks and Swiss giant Credit Suisse, property, insurance and banking shares have been beaten down worldwide.

Which of these shares would I buy today?

If I had to choose one of these shares to add to my family portfolio today, I’d think long and hard. But I strongly suspect my answer would be Big Four bank Barclays (LSE: BARC).

Last Friday, shares in the Blue Eagle bank dived to just over 130p a share. At the time, I kicked myself that I lacked spare cash to buy more Barclays stock. My wife had already bought this FTSE 100 share for our portfolio last July.

Even after this week’s strong comeback, this stock still looks dirt cheap to me. Here are its fundamentals:

Current price144.82p
52-week high198.86p
52-week low128.12p
Market value£22.4bn
Price-to-earnings ratio4.8
Earnings yield21.0%
Dividend yield5.1%
Dividend cover4.1

At currently depressed price levels, Barclays shares trade on a lowly multiple of under five times earnings. This translates into a bumper earnings yield of 21%.

What’s more, the bank’s dividend yield of over 5% a year is covered more than four times by trailing earnings. While I have no doubt that Barclays is set to have a much tougher 2023 than 2022, I see this as a wide margin of safety for long-term investors like me.

Finally, as the UK economy weakens, banks’ bad debts and loan losses are set to surge. Therefore, I predict bank earnings will be dragged down this year. Even so, I see this FTSE 100 stock as a steal at today’s price!

But this isn’t the only opportunity that’s caught my attention this week. Here are:

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Cliff D’Arcy has an economic interest in Barclays shares. The Motley Fool UK has recommended Barclays Plc, British Land Plc, Ocado Group Plc, and Standard Chartered Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services, such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool, we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Road 2025 to 2032 new year direction concept
Investing Articles

Is the Rolls-Royce share price still undervalued in 2025?

After massive growth in the Rolls-Royce share price, Charlie Carman considers whether the FTSE 100 aerospace and defence stock is…

Read more »

Businessman hand flipping wooden block cube from 2024 to 2025 on coins
Investing Articles

How an investor could target a £43k lifelong passive income starting with just £5 a day

Harvey Jones says it's possible to build a high-and-rising passive income by investing small, regular sums in FTSE 100 shares.…

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

£10,000 invested in Lloyds shares on 7 April is already worth…

After a dip in early April, Lloyds shares are back to their 30%+ year-to-date gain in 2025. And analysts are…

Read more »

Tariffs and Global Economic Supply Chains
US Stock

What I’d look to buy as the US stock market heads for the worst month since 1932

Jon Smith sifts through the US stock market to try and find some ideas that have fallen in value recently…

Read more »

Businessman hand stacking up arrow on wooden block cubes
Growth Shares

Prediction: I think £1,000 invested in this UK stock could double by 2030

Jon Smith runs through a FTSE 250 stock with a market cap just over £1bn that he feels has the…

Read more »

Businessman hand flipping wooden block cube from 2024 to 2025 on coins
Investing Articles

With £10k in savings, here’s how an investor could target a second income of £500 a month

£10k in savings could be the foundation needed towards a powerful second income. Our writer details some steps necessary to…

Read more »

Asian man looking concerned while studying paperwork at his desk in an office
Investing For Beginners

£1k invested in the FTSE 100 on ‘Liberation Day’ is now worth…

Jon Smith talks about the volatility in the FTSE 100 in the weeks since the tariff announcements and flags up…

Read more »

Long-term vs short-term investing concept on a staircase
Investing Articles

Barclays’ share price is down 7% from March, so is now the right time for me to buy?

Barclays’ share price has dipped recently, which could mean a bargain to be had. I took a deep dive into…

Read more »