The Boohoo (LSE: BOO) share price has had an awful 12 months. In fact, it’s the second-worst performer in the FTSE AIM 100 index over this time period, having crashed by a huge 71%. The online fashion retailer has struggled with a number of issues related to the pandemic. Costs have risen at the same time that revenue growth slowed, an unfortunate combination leading to the share price crash.

But has the stock fallen too far? And do Boohoo shares represent good value today for my portfolio? Let’s take a closer look.

The bull case

Growth has stalled in fiscal year 2022 (the 12 months to 28 February 2022). But if I bought the shares today, I should consider growth expectations in the following years. This is what could drive the share price higher.

In fiscal year 2023, City analysts are expecting earnings per share (EPS) to rebound by almost 11%. In the following year, EPS is forecast to grow by a further 50%. These growth figures over the next two years, if achieved, should boost the Boohoo share price from its five-year low of 101p today.

The stock is also much cheaper now than it has been in recent years. On a forward price-to-earnings (P/E) basis, the stock is trading on a multiple of 16. Only in 2020, the P/E was almost 50. If the company can grow its earnings by the double-digit forecasts, then the valuation could also rise. A combination of earnings growth and a rising valuation may really boost the share price.

Boohoo is also a diversified business now. It’s made some strategic acquisitions, such as buying PrettyLittleThing and Debenhams. I think the acquisition of Debenhams was a particularly good deal. It’s still being integrated into the wider Boohoo business and there could be further upside in earnings from these acquisitions going forward.

The bear case

There’s no doubt that Boohoo has had a difficult year. Revenue growth was cut from between 20% to 25%, to the now lower 12% to 14%. If this is the start of Boohoo becoming a much slower-growing business, then the share price will not likely surge from here.

However, the board did say that “the factors currently negatively impacting the business are primarily related to the ongoing impact of the pandemic and are, therefore, transient in nature”.

One of these factors is the significantly higher returns rates that Boohoo has experienced. There could very well be an impact from Omicron here as festive party celebrations were cancelled, leading to the increased return rates. However, this is a key risk to monitor going forward, in my view.

Costs were also said to have increased due to ongoing supply chain issues. The pandemic has impacted delivery times and increased freight costs, so I do consider this as a transient risk. Nevertheless, these disruptions may go on for longer than Boohoo anticipates.

Should I buy at this Boohoo share price?

I think there could be a good opportunity here. The growth expectations in the next few years are attractive, and the share price might get a further boost if the valuation rises due to accelerating growth rates. It’s not without risk, but I’d buy Boohoo shares for my portfolio today.

Dan Appleby owns shares of boohoo group. The Motley Fool UK has recommended boohoo 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.

I’m searching for the best FTSE 100 shares to have in my portfolio over the next several years. Here are two top blue-chips I think could make me fat shareholder profits.

Helping consumers through hard times

The prospect that households will have to keep their pursestrings firmly tightened is chilling for most retailers. Centrica CEO Chris O’Shea has said energy bills could stay elevated for two years. Analysts at Goldman Sachs have since projected that gas prices could remain at double their normal levels until 2025 too.

Not all retailers stand to lose out from the rising cost of living however. As we saw following the 2008 financial crisis and the rise of Aldi and Lidl, companies that operate at the value end of the industry can thrive as consumer spending comes under the cosh. It’s one of the reasons I’d buy B&M European Value Retail (LSE: BME) today.

Investors must remember that retailers aren’t immune to inflationary pressures either. The costs they endure to fill the shelves and keep their stores staffed rise in these conditions. But I think the prospect of soaring sales volumes over the next few years more than offsets this problem.

I also like B&M’s plans to expand its store estate to take advantage of this opportunity. The FTSE 100 firm plans to have 950 outlets up and running eventually. That’s a significant lift from the 693 trading as of December.

The FTSE 100 screen idol

I also believe ITV (LSE: ITV) could be a great share for me to buy as advertising revenues hit record highs. I wouldn’t just buy its shares because ad spending keeps soaring. As a long-term investor, I’ve been impressed by the progress the FTSE 100 firm has made to turn its ITV Studios division into a world-class content creator. This has been achieved via a combination of strong organic investment and shrewd acquisitions.

And ITV’s recent strategy update on its production division has boosted my enthusiasm even further. The broadcaster is seeking to double the production of high-end scripted programme hours to 400 by 2026, it said. This should boost ITVs ability to sell content to other channels and streaming companies like Netflix, a critical quality in today’s streaming age. Importantly, ITV Studios is also aiming to boost its global formats operations to boost programme sales worldwide.

Competition for viewers has never been as intense as it is today. Viewers have hundreds of channels to choose from and a swathe of streaming companies too. However, I think ITV will have what it takes to deliver big profits despite this threat.

Soaring viewer numbers at the ITV Hub video-on-demand service also suggests the company has what it takes to compete (the number of registered users here jumped 8% between July and September, to 34.8m).

Like B&M, I think ITV’s a great share for me to buy in February.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended B&M European Value and ITV. 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.

I’m always on the lookout for dividend stocks to buy. I use a simple strategy to improve my chances of picking the best dividend stocks for my portfolio. To me, these companies are those with high yields (above the FTSE 100 dividend yield), but that also pay dependable dividends. So, here’s my ‘secret sauce’ for finding these stocks, and those I’d buy today.

Risks to consider first

My main reason for investing in dividend stocks is the potential for passive income. With interest rates so low (a 10-year UK government bond only yields about 1.2% right now), I can generate more income from dividends. It’s a balance of risk and reward. Dividend stocks give me potentially higher reward (greater income). However, there’s more risk involved.

I essentially own a small slice of a company if I buy the shares. As a business part-owner, I’d be entitled to a small share of the company’s earnings. Businesses aren’t always profitable though. There are a whole host of reasons why, such as increased competition, recessions, or more recently, Covid. Therefore, if the profits of my companies fall, there’s a high chance the dividend will be cut.

This isn’t the same thing with a UK government bond though. I’m almost guaranteed to receive my interest payment from the government, so the risk is lower.

My ‘secret sauce’

To give me a better chance of picking the best dividend stocks, I don’t only look at how high the yield is today. There are two further measures I look for.

#1 Dividend History: how dependable has the company’s dividend been over the past 10 years?

#2 Dividend Growth: is the company expected to grow its dividend next year?

This is what I refer to as my ‘secret sauce’. If I’m satisfied with the answers to these questions, I’m far more likely to buy the shares of the company I’m researching. In my experience, a company that has paid a regular dividend, and is expected to grow it in the following year, makes it an attractive dividend stock.

Best dividend stocks I’d buy today

I’ve been screening for dividend stocks with yields higher than the FTSE 100. The current forward yield on offer is 4%, so I want to aim higher than this. Then I apply my method above to find the best dividend stocks for me.

The first two companies’ stocks I’d buy are Legal & General and Aviva. Both offer yields above 5%, and crucially, have 10-year average yields above 5% too. This shows they’ve been regular dividend payers over the years. Aviva is expected to grow its dividend by 15% next year, and Legal & General by over 4%.

I’d also buy SSE, a utilities company that should offer a dependable dividend income due to the defensive sector it operates in. The forward yield is 5.4% today, and the dividend is expected to grow by almost 4% in 2022. The average 10-year dividend yield has been a highly respectable 6.3% as well.

In summary, dividend investing is not without risk, and is certainly riskier than buying a UK government bond. But if I follow my ‘secret sauce’, I’ve been able to generate dependable dividends over the years.

Dan Appleby owns shares of Legal & General and Aviva. The Motley Fool UK has no position in any of the shares mentioned. 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.

At the ripe age of 91, Warren Buffett is still active in investing. There’s no reason why he shouldn’t be, given his strong track record of picking winners over several decades. His experience is also invaluable as he’s lived and invested through many economic cycles, including market crashes. Given the current wobble in the markets that we’re seeing, here are a few of his pointers that I’m trying to follow.

Buying the dip

Warren Buffett has been quoted as saying that “whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down”. A stock can be marked down when it’s trading at a historically low level. Given the fact that the Nasdaq index is down over 10% so far this year, there are plenty of companies trading on the low side.

Buffett uses a slump to buy not just any stocks, but quality ones. After all, there’s no point me buying stocks during a crash that are going to struggle for years to come. Obviously, this isn’t an easy one to call. Recently, I wrote about four of my favourite stocks that I’d buy if we saw a further crash.

Don’t panic

Another great point from Warren Buffett is that “the sillier the market’s behavior, the greater the opportunity for the businesslike investor”. Often during a market crash, emotion takes over for a lot of investors. It’s tough to see high unrealised losses from stocks that I own and not to panic. This can often trigger more selling activity, pushing prices down to irrational levels.

It’s clear that Buffett doesn’t panic during these periods of extreme uncertainty. He acts in a businesslike way, in effect taking out emotion from the picture. For me, it’s a reminder to keep a cool head. It’s also a reminder to actually flip the negative into a positive and to see a crash as a good opportunity to buy cheap stocks.

Following Warren Buffett in being patient

Finally, I can learn from the point that “no matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant”.

During a market crash, I might have to sit tight for several months before the market recovers. For example, the FTSE 100 only recently broke back above levels seen before the pandemic hit. Some things simply take time. So during a crash, I need to temper my expectations of how long I might need to hold some stocks that are showing a loss for me.

Something that can help me in this regard is if I have some allocation to top dividend stocks. Even if the share price might be falling, I can still generate income from the dividend payments during this time. I think this is a great tool to use as part of my overall stock portfolio.

Jon Smith and The Motley Fool have no position in any of the shares mentioned. 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.

On some measures, the risks of a stock market crash are growing. 

Historical trends suggest that market crashes follow extreme market instability or volatility periods. We have seen a lot of market volatility over the past couple of weeks. This suggests that investors are becoming cautious and easily swayed, which is never a good look. 

At the same time, challenges such as rising inflation and higher interest rates pose risks to the global economy. So, it is not just market sentiment that could lead to a stock market crash, but also deteriorating economic fundamentals. 

Difficult to predict

Unfortunately, it is impossible to predict the future of the stock market. More often than not, we only know that the stock market crash is in process when it is too late. There is generally no warning. 

Further, there is no guarantee a stock market crash will even materialise. I have lost count of how many times I have seen analysts predicting a market slump over the past decade and a half, only for them to be proven entirely incorrect. 

This presents a challenge for investors such as myself. How do I prepare for the worst while not panicking? How do I make sure my portfolio is protected while at the same time leaving the door open to capitalise on any profits if the market continues to push higher? 

Stock market crash protection

The strategy I plan to use is to focus on high-quality growth and income stocks. By using this approach, I think I should be able to navigate any market environment.

These businesses should continue to prosper no matter what happens in the stock market. That is the theory anyway. They could be hit by rising prices and other economic headwinds, destabilising growth.

I will be taking these risk factors into account as I review the opportunities. 

The life insurance and pension markets are both long term markets, which suggests they are both immune to short term market volatility. Indeed, it seems unlikely consumers will stop buying these products just because the stock market drops. 

This is why I think Prudential and Aviva could be some of the best companies to own to ride out a stock market crash. As the world’s population grows, I think the demand for pension and life insurance products will only expand over the next few decades. These organisations can capitalise on this trend no matter what happens in the stock market over the next couple of months. 

Another company I would buy for my portfolio is Tesco. I think it is incredibly unlikely demand for food in the UK will drop if the stock market falls. Therefore, I believe this retailer is one of the most defensive opportunities to buy right now. 

While these businesses may not be completely immune to a stock market crash, I believe they exhibit qualities that should help them weather the storm. 

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Prudential and Tesco. 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.

So far this year, the Lloyds Banking Group (LSE:LLOY) share price has been volatile. It’s down 10% over the past week, but remains up a healthy 41% over the past year. At the moment, there are a lot of key issues that influence the Lloyds share price and will continue to do so for the rest of the year, in my opinion. Here are some that I see as a risk and some that could be of benefit.

Potential boosters for Lloyds shares

The main booster that I think could help to carry the Lloyds share price higher is interest rate hikes. I’ve already noted the sensitivity to rate rises that was seen back in November and December when the Bank of England met. Different economists have differing views of how many times this year the bank will raise rates, with most expecting between two and three increases. Some are even calling for one next month!

If we do see these hikes materialising, Lloyds shares should be carried higher. Even though some of this optimism has already been priced in, I think there’s more room to head higher. Ultimately, higher base rates allow Lloyds to increase the net interest margin it makes. It can build in a larger buffer between the rate it pays on deposits versus the rate it charges on loans.

Another opportunity for the bank this year comes from the dividend potential. This was flagged up in a great piece by my colleague Alan Oscroft. At the moment, the dividend yield sits at 2.52%, nothing to write home about. Yet this was based on the interim dividend of 0.67p. In just over a month, the full-year results are due out, and I’d expect the dividend per share to be raised. 

If we do see this, and the bank indicates that it’s trying to normalise the dividend policy back to pre-pandemic levels, I think Lloyds shares could move higher. I imagine income investors will be keen to add a robust bank to a dividend portfolio.

Risks to consider

What about the flipside? For a start, there’s a clear risk in the fact that Lloyds shares are down 10% over the past week. This isn’t due to anything company-specific, but more about the negative sentiment in the markets right now: fears around high inflation, conflict with Russia, political uncertainty in Downing Street and much more. 

The bank is sensitive to general sentiment, more so than other companies in the FTSE 100 index. This does become a risk if I think that 2022 isn’t going to get better. If I foresee a snap general election, or a Russian invasion, then the Lloyds share price could have further to fall.

A second risk for this year is the rise of FinTechs. In H2 last year we saw several companies go public, including Wise, the money transfer business. It reflects the growing power of FinTechs, be it for alternative banking products or add-ons such as mortgages and loans. Lloyds needs to be careful that the market share it has doesn’t get eaten away by this rising subset in the finance sector.

Personally, I think that the risks outweigh the rewards in the short term, but if we saw the share price continue to tumble in coming weeks then I’d be happy to buy for a long-term recovery.

Jon Smith has no position in any share mentioned. The Motley Fool UK has recommended Lloyds Banking 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.

I believe using a Stocks and Shares ISA is one of the best ways to build wealth. Any assets owned within one of these wrappers are not liable for capital gains or dividend taxes. This means I can reinvest my profits without worrying about giving a portion away to the taxman. 

Unfortunately, investing in a Stocks and Shares ISA alone does not guarantee success. I have to pick the right investments as well. This is a lot harder than it might seem. Even professionals regularly get it wrong when picking the market’s best investments. 

Nevertheless, I have settled on a strategy that I believe can yield solid results for my portfolio. And it is the strategy I am using to invest £200 a month for the long term. 

Stocks and Shares ISA investments

There are two different prongs to my investment approach. First of all, I am looking for high-quality companies to buy for my portfolio. I am trying to stick with corporations I know well which provide a product or service I am familiar with. 

A great example is the technology group Rightmove. I am very familiar with this company’s online property platform and understand how it makes money. I am also impressed by its fat profit margins and high return on invested capital. With an operating profit margin of nearly 73%, the enterprise is one of the most successful businesses on the London market. 

While I would buy this stock for my portfolio, I plan to keep an eye on some of the risks it has to deal with. These include competition and rising costs which could hit profit margins. The market may decide to re-evaluate the company’s potential if profit margins fall significantly. 

Diversification

As well as buying single stocks such as Rightmove, I am also buying investment funds for my Stocks and Shares ISA. 

I think funds are the perfect way to invest a small monthly sum, such as £200, because this approach allows me to invest in a diverse portfolio of stocks quickly. It may not be economical to do this myself with just £200, but it is by pooling my money with other investors.

One of my favourite investment funds on the market is the LF Blue Whale Growth Fund. This fund invests in a portfolio of global growth stocks and has been on the money when it comes to picking winners over the past couple of years. 

The downside of using this approach is the cost. Blue Whale charges around 0.9% per annum in fees to manage the portfolio. This could have a significant impact on my returns in the long run. 

Still, even after taking these fees into account, I believe the fund, coupled with a selection of high-quality stocks, is the best approach to invest a lump sum of £200 a month in my Stocks and Shares ISA. 

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Rightmove. 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.

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The FTSE 100 is rising today, but it slumped in the prior three trading days and is about 3.3% below its most recent high. The UK’s main index did slip as low as 4% below this year’s high watermark on Monday. The speed of the decline – it happened in just a couple of days – sparked talk of a stock market crash. Over in the US, the talk of a stock market crash is even louder. The main US index, the S&P 500, is 9.5% off its most recent high, and briefly dipped below 10% yesterday. It has taken since early January for the S&P 500 to fall to its current level.

So, it might sound odd to be asking when the next stock market crash is coming. Surely I am sitting in the middle of one? The wider investing community seems to have settled on a market dropping 10% from a recent high as being in correction territory. So the S&P 500 entered correction territory yesterday, but the FTSE 100 did not. However, what makes a stock market crash different from a correction is speed. I would suggest that a stock market crash is a fall of at least 10% that occurs rapidly. But how rapidly? A 10% drop in days, perhaps up to a few weeks sounds about right.

Stock market corrections

Given that there is no well-defined consensus on how quickly a market needs to decline by a significant amount to make it a stock market crash, it is difficult to compile a list of crashes. There was of course the crash in 2020, caused by the coronavirus pandemic. Then there was the great financial crisis that inspired a crash in the late 2000s, and the dot.com bubble burst in the early 2000s. These crashes are not in doubt, but others are. But I argue that the speed of the decline is not all that important. What matters more is the magnitude. Thankfully, Charlie Bielo, an author at Compound Advisors, has crunched S&P 500 returns and produced useful data on the average frequency.

Table 1. How often can we expect stock market corrections of various magnitudes?

Source: Charlie Bielo, Compound Advisors

A correction of 10% is expected about every one and a half years. A 15% correction every two and a half years, a 20% event every four years and a 30% correction every nine years. Now, a 10% correction as we have seen stirs up a lot of commentaries and indeed panic. I should expect to see such a correction after being in the markets for just 18 months or so.

When will the FTSE 100 crash?

I don’t know when the next FTSE 100 stock market crash will be. However, assuming the S&P 500 data is applicable, I should expect to see a significant correction in the FTSE 100 about every 1.6 years. If that correction is fast enough, then there will be talk of a stock market crash. The FTSE 100 fell under 5% recently and that generated a lot of panic, and those types of events happen every year or so. Thankfully, larger drops are rarer, but the longer I am in the markets the more likely it is I will experience one.

James J. McCombie has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

Over the past few years, Scottish Mortgage Investment Trust (LSE: SMT) has rewarded shareholders handsomely. But recent performance has been less impressive. The Scottish Mortgage share price is down 20% over the past year. It has fallen steeply lately, losing 28% since I explained my bearish stance on the shares in late September.

After that sort of fall, could now be a good time for me to add Scottish Mortgage to my portfolio?

Positive points about SMT

First I think it is worth mentioning several things that I like about the company.

It has a stellar track record in identifying high-growth companies at an early stage in their development. Seizing such investment opportunities has been highly lucrative for SMT shareholders. Although the past year has been disappointing, the long-term results of the company’s investment strategy remain spectacular.

As well as that, the company has one of the longest runs of maintaining annual dividends with no cuts amongst UK companies. The trust last cut its dividend in 1933. The current yield of 0.3% does not excite me. But I do like the fact that, over generations, the company has demonstrated careful financial stewardship that has allowed it to maintain dividends.

My concerns about the Scottish Mortgage share price

If I think there is a lot to like about Scottish Mortgage, why am I not planning to add it to my portfolio even after the share price has fallen sharply?

In short, I think there could be further declines to come. SMT is basically a form of collective investment vehicle. It pools its shareholders’ funds and uses them to buy shares in a variety of companies. That would allow me to get exposure to unlisted companies I cannot buy in the form of shares, such as SpaceX. But it also means the SMT share price moves around broadly in line with what happens to its underlying investments.

The company’s heavy focus on tech and China in recent years paid off well for a long time. But tech shares are currently facing heavy selling in the stock market. Chinese tech shares in which SMT has a position, such as Tencent, have also had a challenging time lately. Tencent shares have lost 35% over the past year. The tech sell-off helps explains why the Scottish Mortgage share price has fallen. But it also makes me think that it could lose even more value in coming months. If the tech selling we have seen recently accelerates, that could hurt the company. Its price may fall further.

Why I am not buying

That is why I continue to avoid SMT and will not be buying it for my portfolio. Although I think it could show good returns again at some point in the future, for now I remain concerned that falls in the tech market could hurt its own valuation.

Christopher Ruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.