I believe that some FTSE 100 shares are now more attractive than ever due to market volatility.
Why have FTSE 100 shares struggled?
To start with, macroeconomic volatility has hampered many markets across the world. This includes soaring inflation and the measures to counteract this, namely higher interest rates.
In the case of the UK, additional issues including a cost-of-living crisis as well as the looming spectre of a housing crash. Plus, foreign investors are uncertain of the direction of the UK economy due to Brexit and have therefore cooled their investment interests.
Finally, tragic geopolitical events in the world at present haven’t helped.
Despite all this, some FTSE 100 shares have been thriving. Marks & Spencer (LSE: MKS) is one.
Am I too late to the party?
Marks and Spencer is one of the biggest retail chains in the UK selling clothes, homeware and food. It has 400 store locations in the UK and 150 overseas as well as a good online presence.
As I write, Marks shares are trading for 212p. At this time last year, they were trading for 106p, which is a 105% increase over a 12-month period! That’s remarkable considering FTSE 100 shares have mainly stuttered in the past few months.
Why have Marks and Spencer shares been flying? I believe this is in part due to its excellent performance for 2023. Revenues increased by a healthy 9.6% to £11.93bn compared to the previous year. Furthermore, pre-tax profit jumped by close to 22% to £475.7m.
Plus, the Q1 trading update released a couple of months ago also made for good reading. The business said that it had managed to increase market share in the food and clothes segment. Like-for-like food sales increased by 11% compared to the same period last year and food sales grew by 6%. Despite challenging conditions, the business looks like it’s doing very well.
Finally, Marks shares still look decent value for money on a price-to-earnings ratio of 11. FTSE 100 shares’ average ratio is around 14. So even after the rapid share price rise, the shares look good value.
Risks and what I’m doing now
One issue that could impact Marks is the fact it is viewed as a more premium retailer. Due to the cost-of-living crisis, there is a chance that consumers could turn towards cheaper alternatives and this could hinder Marks and Spencer’s performance. This doesn’t look like it has had an impact to date but the next update is coming in November and I’ll be watching with interest.
Plus, as the Marks share price has soared so remarkably in recent times, even a small bump in the road could send the shares tumbling.
I do like the look of the Marks shares and even though I’m a bit late to the party, I’d still be willing to buy some shares for my holdings when I next have some spare cash to invest. Marks is one of a number of FTSE 100 shares bucking general trends and doing well.
