The past 12 months have been positive for the FTSE 100. The UK’s blue-chip index has gained an eighth (+12.5%) since 1 March 2021. Adding cash dividends of up to 4% boosts this return to around 16.5%. What’s more, the Footsie has actually beaten the S&P 500 over this period. The main US market index has climbed 11.7% in 12 months. Adding dividends of around 1.4% takes the total return to roughly 14.1%. Thus, after more than a decade of underperformance, London is finally beating New York. Even so, I see plenty of cheap shares hiding in the FTSE 100 today. Here are five stocks that I don’t own that have crashed spectacularly over the last 12 months.
Footsie fliers and failures
Over the past 12 months, 65 of the 100 shares in the FTSE 100 Index have risen in value. Gains among these 65 winners range from 78.4% to 0.4%. The average increase across all 65 gainers is 22.4%. (All figures exclude dividends). At the other end of the scale lie 35 losers. Losses among these fallers range from 1% to 80.8%. The average fall across all 35 FTSE 100 flops is 17.6%. To me, these laggards include many cheap shares. However, they also include some fearfully risky and volatile stocks that I plan to steer well clear of.
The FTSE 100’s five biggest flops
These are the FTSE 100’s five biggest fallers over the past 365 days:
| Company | Sector | 12-month loss |
| London Stock Exchange Group | Financials | -34.1% |
| Abrdn | Financials | -38.3% |
| Ocado Group | Retail/Technology | -38.4% |
| Evraz | Mining | -80.8% |
| Polymetal International | Mining | -80.8% |
As you can see, losses among these FTSE 100 failure range from over 34% to more than 80%. The two worst performers — Evraz and Polymetal — have both imploded because they share the same boat. As I warned last Friday, both are Russia-focused mining groups. Evraz is a major global steelmaker, while Polymetal mines gold and silver. Based on current fundamentals, these cheap shares appear to be incredible bargains. However, they are uninvestable to me, simply because the bulk of their business is done in Russia. In my mind, anyone buying these crashed shares today would need nerves of titanium, never mind steel.
The three remaining businesses are all UK firms. Ocado Group is a technology-driven retailer with partners around the world. However, I’m not convinced by its business model, as I warned recently. Although this stock has rebounded by 10.4% since 8 February, I will avoid Ocado for now. I’m also not a big fan of asset manager Abrdn, formerly known as Aberdeen. Despite more than halving (-54.5%) over the past five years, I’m not tempted by this stock. Indeed, spending millions to rebrand by removing the vowels from its name was one huge red flag for me.
Cheap shares? Not exactly…
The third UK share is London Stock Exchange Group, a leading operator of stock exchanges in Europe. As I noted recently, athough the LSEG share price swooned in 2021-22, I look beyond to see a solid underlying business. At its all-time high, the LSEG share price hit 10,010p on 16 February 2021. As I write, it stands at 6,426p, down 3,584p (-35.8%) from the peak. This values the fintech group at £36.1bn. Although these are not cheap shares based on currently elevated fundamentals, I see a bright future for this firm. Over five years, this stock has more than doubled (+106.2%). I don’t own this share, but I’d buy at current levels. And then I’d hope that global stock markets rebound in 2022-23, rather than keep sliding!
Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Ocado Group. 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.
