As a value investor, I enjoy hunting down cheap stocks, particularly in the FTSE 100 index. At the weekend, I spotted five beaten-down shares that have suffered a terrible 2021.
The FTSE 100’s five biggest fallers over one year
These are the FTSE 100’s five largest losers over the 12 months to Friday, 3 December.
| Company | Sector |
One-year fall |
| Fresnillo | Mining | -22.3% |
| International Consolidated Airlines Group | Airlines | -22.5% |
| London Stock Exchange Group | Financials | -24.8% |
| Ocado Group | Retailing | -27.0% |
| Flutter Entertainment | Gambling & betting | -29.9% |
Share price losses at these FTSE 100 flops range from 22.3% to almost 30%, with an average loss of 25.3%. Furthermore, I see three of the stocks as being particularly volatile next year:
Fresnillo: a play on precious metals
Fresnillo (LSE: FRES) — based in Mexico City and listed in London — was established in 2008. It’s the world’s largest producer of silver from ore and Mexico’s second-largest gold miner. Currently, Fresnillo operates seven mines, three development projects, and six exploration prospects. Its flagship mine has been in use for more than 500 years. In 2020, the firm produced 53.1m ounces of silver and 769.6k ounces of gold.
Fresnillo’s profitability is strongly tied to the prices of silver and gold, both of which have declined over the past year. This FTSE 100 share’s price has ranged from a high of 1,280p on 7 January 2021 to a low of 742.6p on 27 July. On Monday, it closed at 887.8p, valuing the miner at £6.5bn. I don’t own this share at present, but I’d buy at current price levels. However, I’d fully expect this mining stock to be similarly volatile in 2022.
IAG: airline fracture?
Shareholders in airline chain International Consolidated Airlines Group (LSE: IAG) have had a turbulent trip in 2020-21. Thank to Covid-19 lockdowns, the IAG share price has collapsed since January 2020. Over the past 12 months, the stock has ranged from a high of
I don’t own this FTSE 100 share, but I’m encouraged by recent rebounds in the IAG share price. In the past six trading sessions, this stock has leapt by 16.6% from its late-November low. This followed reports that the latest Covid-19 Omicron variant is less harmful than first feared. Even so, I wouldn’t buy IAG at present. I’d prefer to see how things develop going into 2022 and the spring holiday season.
Ocado: a FTSE 100 flop in 2021
My third FTSE 100 faller that could continue to struggle is online supermarket Ocado Group (LSE: OCDO), whose shares have endured a torrid 2021. At its 52-week high, Ocado stock surged to 27 January. On 28 January, I warned that this growth stock was a bubble waiting to burst. Sure enough, it’s been steeply downhill ever since. On Monday, the stock closed at 1,582p, down 2.7%. This values the loss-making high-tech grocer at £11.9bn. What’s more, this Footsie share currently trades just 36.68p (+2.4%) above its 2021 low of 1,545.32p on 12 October.
I don’t own Ocado shares at the moment — and I would decline to buy at current levels. In its 11 years as a public company, Ocado has run up massive losses chasing customers and revenues. Also, it burns through cash and has never paid a dividend. Lastly, I suspect this FTSE 100 share’s price could continue to bounce around wildly in 2022!
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Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo and 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.
