It’s been a bumpy, volatile journey for shares so far this calendar year. After hitting an all-time high in early January, the US stock market then crashed hard. At its low, the US blue-chip S&P 500 index had lost almost a quarter (-24.5%) of its value by mid-June. But stock prices have since bounced back from their lows. Meanwhile, the UK FTSE 100 index has been a relatively safe port in this storm. Indeed, London’s leading index currently stands a mere 5.4% below its 52-week high.
However, the London market has zigzagged up and down frequently this year, so much so that the FTSE’s chart for 2022 closely resembles a saw’s teeth. So far this calendar year, the index has lost just 1.5% of its value to date — a mere blip for most UK-focused investors.
Some FTSE shares have had a grim six months
Of course, the stock market is a huge collection of shares, some of which have been winners in 2022, while others have been laggards or losers. Earlier today, I scoured the Footsie for shares that have had a terrible time lately.
I discovered that, of the 99 shares in the FTSE 100 index for the past six months, 46 have risen in value in the past half-year. These gains range from just above 0% to a tidy 46.8%, with the average increase being 12.1%.
At the other end of this scale lie 53 losers that have declined in value over the last half-year. These losses range from a mere 0.4% to a whopping 42%, with the average fall being 14.5%. But 13 of these Footsie fallers have lost more than a fifth of their value since early March. Eek.
These are the Footsie’s two biggest fallers
For the record, these are the FTSE 100’s two biggest slumpers over the past six months:
| Company | Sector | Share price | 6-month fall | 12-month fall | Dividend yield |
| B&M European Value Retail | Retailer | 370.6p | -35.1% | -32.5% | 4.5% |
| Ocado Group | Retailer | 691.2p | -41.5% | -65.7% | – |
Note that both of these FTSE dogs are retailers. B&M European Value Retail is a leading ‘variety discounter’ with over 700 stores. Its products are particularly popular with bargain hunters (like me) and low-income households. Thus, I suspect it might do better than most retail chains in a possible recession. Meanwhile, Ocado Group is a technology-led partner aiding a number of supermarket chains worldwide with their online distribution. Alas, given the low-margin nature of its market, I worry that Ocado is still years away from making decent profits.
Which of these shares would I buy today?
As I’ve long been a sceptic of Ocado and its business model, I’ve never considered buying its shares (especially after they skyrocketed in 2020-21). As a veteran value investor, I prefer to invest in companies with strong cash flows, earnings and dividends. And having never made a proper profit in its 22 years of existence, Ocado and its shares are simply not for me.
Conversely, I do like the look of B&M, Ocado’s more down-to-earth rival. Buying this FTSE share would give me a dividend yield of nearly 4.5% a year, covered almost 2.6 times by trailing earnings. That looks like value to me, despite the growing risk of a prolonged UK recession driving down corporate profits and earnings!
This post was originally published on Motley Fool
