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%.
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:
Company
Sector
One-month % change
One-year % change
Five-year % change
British Land
Property
-16.2
-31.2
-42.0
Beazley
Insurance
-16.4
+32.3
+1.1
Barclays
Banking
-17.7
-9.2
-31.1
Standard Chartered
Banking
-23.4
+17.6
-15.6
Ocado Group
Retail/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 price
144.82p
52-week high
198.86p
52-week low
128.12p
Market value
£22.4bn
Price-to-earnings ratio
4.8
Earnings yield
21.0%
Dividend yield
5.1%
Dividend cover
4.1
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!
The post After steep falls, these FTSE 100 shares look dirt cheap to me appeared first on The Motley Fool UK.
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More reading
3 mind-blowingly cheap shares to buy in April
Here’s the dividend forecast for Barclays shares in 2023 and 2024
These were the FTSE 100’s biggest losers last week!
6.2% dividend yield! Should I buy this dirt-cheap FTSE 100 stock?
If I’d invested £1,000 in Barclays shares a year ago, here’s how much I’d have now!
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.