After an encouraging end to 2023, it’s likely been a rough start to 2024 for at least a few FTSE 100 shares. Some have set fresh 52-week lows.
But I reckon these might be some of the best stocks to buy today.
Heavy faller
Trainer seller JD Sports Fashion (LSE: JD) tanked in value on Thursday (4 January) as the company predicted that annual profit would hit £935m at best. That was 10% below the figure previously forecast.
This must have been frustrating for shareholders as it effectively wiped out all the gains made in the final quarter of 2023 when markets rallied in anticipation of future interest rate cuts.
JD’s management attributed the profit warning to heavy discounting as retailers fought for every pound from cautious consumers. Warmer weather was also blamed.
CEO Régis Schultz did his best to soothe investors’ nerves with talk of the company continuing to grow its share of the market. But a whopping 20%+ drop in the share price suggests many were unconvinced.
Going cheap
There’s an argument for thinking that things could stay tricky. Indeed, Michael Hewson from CMC Markets notes that various forecasters are predicting “an immensely challenging economic outlook” for 2024.
Then again, I wonder if the market reaction to Thursday’s news was overdone.
I’d be more concerned if JD’s woes weren’t also being felt by others in the space. However, US sportswear giant Nike already reported reduced demand before Christmas.
Moreover, the shares now change hands for just 10 times forecast earnings. That looks cheap to me, especially as recent headwinds have a ‘temporary’ feel to them.
If discretionary spending is given a shot in the arm from rate cuts in 2024, the probability of JD recovering and thriving in time is surely high.
Being diversified is still vital. But I’d at least begin building a position today if I had the cash to do so.
Big FTSE 100 loser
Also setting a fresh 52-week low has been luxury firm Burberry (LSE: BRBY). I see this as another opportunity for quality-focused investors like me.
The fall here has been more gradual but no less nasty. Shares have been on a downtrend since last May, losing more than a third of their value.
Much of this is down to slowing sales growth in key markets due to the cost-of-living crisis. This was especially true in the Americas.
In anticipation of the firm not hitting revenue and profit guidance, investors have been exiting. This has left the shares trading at just 13 times earnings.
Nothing to see here
For similar reasons to JD, one shouldn’t assume that trading at Burberry will bounce back in a matter of weeks. The very fact that the share price keeps setting new 52-week lows is evidence of that.
Still, I maintain this is a temporary sticky patch rather than anything more worrying. Peers like LVMH have been suffering too as spending on pretty much anything other than holidays seems to have taken a back seat.
Displaying status is one thing, just surviving is another.
I reckon the all-too-human desire to impress others should return in spades in the next bull market. In the meantime, there’s a market-beating 4.1% dividend yield in the offing.
Time for me to raid the piggy bank.
