Are these FTSE 100 stocks the biggest bargains on the London Stock Exchange?

These are the worst-performing FTSE 100 stocks of 2024 so far. But is one a secretly amazing investment trading at a dirt cheap price?

| 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.

Surprised Black girl holding teddy bear toy on Christmas

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.

The last six months have been terrific for the FTSE 100. The UK’s flagship index has been busy gaining momentum this year as economic conditions improve. And after years of lacklustre returns, British investors are reaping some chunky payouts.

Sadly, not all constituents have been so lucky. Despite overall positive momentum, some firms have been left behind, falling significantly. But could these downward trajectories secretly have created incredible buying opportunities?

Let’s explore the five biggest losers of 2024 so far and determine whether any bargains have emerged.

Inspecting FTSE 100 losers

Here are those biggest losers of the year to date.

  1. Burberry Group (LSE:BRBY) – down 48.9%.
  2. Entain – down 44.4%.
  3. Ocado Group – down 29%.
  4. Reckitt Benckiser Group – down 27%.
  5. Spirax Group – down 24.2%.

 Immediately, it’s clear that the losses haven’t been isolated to a single industry. This list of worst performers covers the fashion, leisure, retail, and engineering sectors. And plenty of other businesses from these industries have fared far better. The most obvious example in engineering would be Rolls-Royce, with shares surging over 50% in the last six months.

The catalyst behind the fall of each business is ultimately different. So let’s zoom in to the biggest loser – Burberry – to work out what went wrong and whether now’s a good time to buy.

What’s going on at Burberry?

Being a luxury fashion brand in 2024 isn’t easy. The higher cost of living’s proven to be a significant headwind for luxury retailers as households are more focused on saving rather than spending. However, the firm’s new creative direction doesn’t appear to have resonated with customers either. And the combined impact of these factors is perfectly clear when looking at Burberry’s financial performance.

Sales are down by double digits, and operating profits are on track to miss full-year analyst expectations. So it’s no wonder the stock’s tanking. But on a more positive note, management isn’t blind to what’s going on. And the firm appears to be rethinking its new creative direction to realign its designs toward what core customers are more familiar with.

To oversee this U-turn, the board’s decided on a change of leadership. And after less than three years in the role, Jonathan Akeroyd’s been ousted as CEO, replaced by Joshua Schulman, the former CEO of luxury accessories brand Coach. And his performance while running that business was admirable, driving up bag sales considerably.

Time to buy?

If Schulman can replicate his previous successes at Burberry, snapping up shares at their current price could be an immensely lucrative decision. After all, they’re now trading at a price-to-earnings ratio of just 9.3. However, at this stage, that’s a big “if”.

There’s no guarantee Schulman will be successful, and executing a turnaround strategy could take some time. Personally, I think it’s better to keep Burberry on my watchlist until some signs of progress emerge.

As for the other beaten-down FTSE 100 stocks, investors need to take time investigating what’s dragging down the shares to determine whether they’re bargains or a traps. Even if now might not be the best time to buy, it could reveal potentially interesting opportunities further down the line.

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.

Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Burberry Group Plc and Reckitt Benckiser Group 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

Investing Articles

How I’d use an empty Stocks and Shares ISA to aim for a £1,000 monthly passive income

Here's how using a Stocks and Shares ISA really could help those of us who plan to invest for an…

Read more »

Investing Articles

This FTSE stock is up 20% and set for its best day ever! Time to buy?

This Fool takes a look at the half-year results from Burberry (LON:BRBY) to see if the struggling FTSE stock might…

Read more »

Investing Articles

This latest FTSE 100 dip could be an unmissable opportunity to pick up cut-price stocks

The FTSE 100 has pulled back with the government’s policy choices creating some negative sentiment. But this gives us a…

Read more »

A young woman sitting on a couch looking at a book in a quiet library space.
Investing Articles

As the WH Smith share price falls 4% on annual results, is it still worth considering?

WH Smith took a hit after this morning’s results left shareholders unimpressed. With the share price down 4%, Mark Hartley…

Read more »

Investing Articles

The Aviva share price just jumped 4.5% but still yields 7.02%! Time to buy?

A positive set of results has put fresh life into the Aviva share price. Harvey Jones says it offers bags…

Read more »

Investing Articles

Can a €500m buyback kickstart the Vodafone share price?

The Vodafone share price has been a loser for investors in recent years, and the dividend has been cut. We…

Read more »

Frustrated young white male looking disconsolate while sat on his sofa holding a beer
Growth Shares

3 mistakes I now avoid when choosing which growth stocks to buy

Jon Smith runs through some of the lessons he's learnt the hard way over the years about what to look…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

Should I follow Warren Buffett and sell my favourite shares?

Billionaire US investor Warren Buffett has been selling tons of Apple shares and other stocks of businesses he thinks are…

Read more »